Give taxis more room to compete on pricing

It is commendable that the Competition Commission of Singapore (CCS) has decided to investigate the Grab-Uber merger to ensure a competitive landscape is preserved (Grab-Uber deal faces interim action to ensure competition; March 31).

However, this incident raises a question: Have taxi companies even been competing at all against Uber and Grab over the past few years?

Prior to the arrival of Uber and Grab, Singapore had a taxi industry that competed intensively among themselves.

But under the Public Transport Council (PTC) and the Land Transport Authority's (LTA) mandate, taxi companies were forced to adopt a unified fare structure, and could vary only certain components of their fares.

Uber and Grab had focused on competing on the basis of fares - their dynamic pricing system against the taxis' regulated fare system.

The outdated and non-competitive nature of the taxi fare structure was revealed.

Commuters began switching to private-hire vehicles because of the cheaper ride.

It is worrying that despite private-hire vehicles having been around for such a long time, our taxi companies have been unable to adapt to the competition and changes.

The CCS, PTC and LTA have to review the current taxi fare structure and make it competitive against Grab's pricing strategy.

Chan Choon Yuan

A version of this article appeared in the print edition of The Straits Times on April 03, 2018, with the headline 'Give taxis more room to compete on pricing'. Print Edition | Subscribe