SINGAPORE - Private-hire car services Uber and Grab could be regulated in the future, and even subject to licensing, as the Government undertakes a review of the point-to-point transportation sector.
Due to the growth of the industry, it is "imperative" that the Government has sufficient regulatory oversight over ride-hailing apps, to protect the interests of commuters and drivers, said Second Minister for Transport Ng Chee Meng on Wednesday (March 7).
Mr Ng said in Parliament that the current basic regulatory regime has limitations and only licenses drivers of these ride-hailing apps and their vehicles.
The Government is now studying how to license ride-hailing services, which will give it a "broader range of regulatory levers" to ensure the industry grows in a manner which meets the needs of commuters, drivers, and Singapore's broader transport landscape, Mr Ng added.
While the Land Transport Authority (LTA) can issue suspension orders to stop drivers from operating for ride-hailing services, this is a "very blunt tool" as it impacts commuters and drivers as well, Mr Ng said during a debate on the Ministry of Transport's budget.
Mr Ng noted that the ride-hailing services should "bear greater responsibility in ensuring the safety of commuters" beyond the existing requirements.
Mr Ng was responding to Mr Ang Hin Kee (Ang Mo Kio GRC), who raised concerns about the growing market dominance of Uber and Grab, which have also formed alliances with taxi firms.
In December, taxi giant ComfortDelGro announced its intention to acquire a 51 per cent stake in Uber's car rental subsidiary, Lion City Holdings. The deal is still under review by the Competition Commission of Singapore (CCS).
Then in January, Uber and Comfort pooled their private-hire cars and taxis under a common booking service called UberFlash.
Uber's rival Grab, meanwhile, had partnered with the remaining five taxi firms to also pool their vehicles under one booking platform called JustGrab, in March last year.
Recently, there have been rumours of Grab buying out Uber's business in Southeast Asia, stoking speculation of further market consolidation.
Mr Ang said should one operator become dominant, commuters may have to bear with higher fares and lower service standards, and drivers will also have to put up with the conditions set by the company, or risk losing their jobs.
In reply, Mr Ng said the Government's review will look into ensuring the point-to-point transport market remains "opens and contestable".
"We must make sure that commuters and drivers continue to have options, and that no one single market player will dominate the industry to the detriment of commuters and drivers," he assured the House.
The review of the private-hire car and taxi sector, which is targeted to be completed this year, will also look into the possibility of licensing ride-hailing apps, like what is being done in London.