Cab firm Smart's fleet too small for licence renewal

TAXI firm Smart is facing an uncertain future due to doubts over whether its licence will be renewed.

The company does not have enough cabs to meet rules introduced last year.

It will have to stop operating by the end of September unless its application - which is "still under evaluation" - is granted by the Land Transport Authority (LTA).

If its licence is not renewed, the number of taxi companies in Singapore will be reduced to six.

The uncertainty hanging over Smart - which entered the fray in 2003 when the market was liberalised - lies in its failure to meet the basic requirement for renewal: a minimum fleet size.

Last year, the LTA announced that operators must have at least 800 vehicles each by the time their decade-long licences come up for renewal.

But by this May, Smart's fleet stood at 315 - the smallest of all the companies.

Even Prime, the newest player, had 808 cabs.

Smart managing director Johnny Harjantho said: "It's a chicken and egg issue. We can't expand if we are not certain that our licence will be renewed. We've told the authorities that if they give us the renewal, we will expand."

Mr Harjantho - who once said he would consider selling his operations "if someone gives me a very good offer" - told The Straits Times yesterday that he was still interested in continuing in the taxi business in Singapore.

From next year, it will be more difficult for operators to expand their fleet. This is because the LTA has stipulated that companies which want to do so will have to meet new standards.

These rules - which kicked in in January - require each operator to have 70 per cent of its fleet clock at least 250km a day, and keep 70 per cent on the road during peak hours. The standards will each rise to 85 per cent by 2015.

In the four months since the standards kicked in, only Comfort and CityCab have passed both.

Mr Lim Chong Boo, managing director of taxi firm Premier, said "the availability standard is too stringent". He added that while the cab business is still commercially viable in Singapore, "compliance has become costlier".

For instance, his company has spent "a few million dollars" to put a satellite-based taxi dispatch system in place - one of the requirements that operators must meet.

Five other taxi firms' operating licences expire this year. Comfort, CityCab, SMRT and Trans- Cab have been granted a renewal for another 10 years, said the LTA. Premier has had an "an offer of renewal", which means only formalities remain.

Meanwhile, Singapore's taxi fleet has shrunk by 2 per cent to 27,719 from January to May.

One analyst warned that if the shrinkage persists, "we could see it offset the improvements in availability, if any, that come from the new standards".

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