SINGAPORE - Taxi companies have been given the green light to implement a new "dynamic pricing" system, in which fares will vary according to passenger demand.
In a joint statement, the Land Transport Authority (LTA) and the Public Transport Council (PTC) said on Friday (March 17) they have "no objections to the proposals" put forth by the cab operators on the new fare system, also known as surge pricing.
Dynamic pricing, however, will be an additional option for commuters booking a taxi, on top of the current metered rates.
Earlier this month, it was reported that several taxi operators had informed the PTC of their plans to implement the controversial pricing system, which is available in the Grab ride-hailing app.
Under it, customers will be quoted a flat fare when they book a taxi via the app, which they can choose to accept or reject.
On Friday, SMRT announced a partnership with Grab to introduce the dynamic pricing system.
The company, which has a fleet of more than 3,400 taxis, said: "Dynamic fixed fares are displayed upfront, and already accounts for travel time, distance, booking fees, and real-time demand and supply for taxis.
"SMRT taxi drivers who accept bookings via this new Grab service enjoy fixed, competitive fares for their service."
Surge pricing is used by apps Uber and Grab for its private-hire car services.
It has drawn flak from some commuters for being exorbitant, particularly during periods of high demand. There were instances when fares went up by 3.9 times during train breakdowns.
Second Minister for Transport Ng Chee Meng said in Parliament last week that the taxi industry should be allowed to " innovate and adapt to new market conditions and competition".
"Our taxi drivers have to make a living, and we should not restrict their ability to compete effectively." Mr Ng added.