The market for taxi and taxi-like services has doubled since private-hire car services Uber and Grab began operating here in 2013.
Transport Minister Khaw Boon Wan told Parliament yesterday that these private-hire services have now claimed about half the market for point-to-point transportation services.
This comes as the total number of taxi trips has remained relatively stable, with only a slight drop from an average of 967,000 trips daily in 2013 to 954,000 trips daily last year, he said.
"That means that the new players have been meeting new demand or unmet demand," he said, in response to Mr Gan Thiam Poh (Ang Mo Kio GRC).
Mr Gan had asked if the Transport Ministry would control the private-hire car population, citing concerns that the expansion of private-hire car services could drive up certificate of entitlement (COE) premiums.
Demand from Uber and Grab has fuelled an increase in the rental car population over the last two years.
There are now about 53,000 rental cars in Singapore, compared with around 29,000 in 2015.
Mr Khaw said his ministry will leave the growth of private-hire cars to market forces and monitor the situation.
New services that apply innovative business models and improve the commuting experience should not be stifled, he added.
"The best approach I think is to let Singaporeans decide," he said.
Referring to a recent survey conducted by the Public Transport Council, he said commuters expressed greater satisfaction with Uber and Grab compared with taxis in areas such as customer service and waiting times.
However, he noted that satisfaction with taxi services also went up between 2015 and 2016, due to taxi operators ramping up efforts to improve service in the face of competition from Uber and Grab.
"So in this particular space, competition has been good," he said.
On private-hire car services affecting COE premiums, Mr Khaw said the evidence "does not suggest" premiums are going up as a result of private-hire car services.
He said the bids submitted during each cycle were "more or less" at the market rate, and that private-hire car firms were "not being particularly aggressive" in bidding.