ComfortDelGro to launch dynamic pricing fare option for its taxis from Jan 19

ComfortDelGro will begin its dynamic pricing system for taxis on Jan 19, 2018.
ComfortDelGro will begin its dynamic pricing system for taxis on Jan 19, 2018.PHOTO: ST FILE

SINGAPORE - Singapore's largest taxi operator ComfortDelGro will launch a dynamic pricing system for its 13,600 cabs from Jan 19.

For customers, this means that fares for Comfort and CityCab taxis could be lower than the metered rates during off-peak hours, but also surge during periods of high demand.

The dynamic pricing option for ComfortDelGro taxis will be offered through the Uber app and a new UberFlash function. The service dispatches the nearest ComfortDelGro taxi or Uber private-hire car to the user who requests a ride.

The move to pool the supply of ComfortDelGro taxis and Uber cars on a common platform follows an alliance between the two companies announced last month.

The deal, which is still under review by the Competition Commission of Singapore, will see ComfortDelGro acquiring a 51 per cent stake in Uber's rental car subsidiary, Lion City Holdings.

According to a newspaper notice put up by ComfortDelGro on Thursday (Jan 11), UberFlash charges a base fare of $3, with a per kilometre rate of 45 cents.

In comparison, the metered rates for ComfortDelGro taxis are higher, with a base fare of between $3.20 and $3.90, and a distance charge that works out to 55 cents a kilometre for the first 10km, and 63 cents per kilometre thereafter.

However, UberFlash fares fluctuate according to demand. Commuters have lamented that fares can be two to three times more during peak periods, or when there are MRT disruptions.

ComfortDelGro customers can still go by the meter for street-hailed cabs and taxis booked via ComfortDelGro's booking hotline or company app.

Like other Uber products, UberFlash will levy a fee if passengers are late in meeting their drivers or if they cancel their bookings.

A 20-cent per minute charge will apply if drivers wait longer than three minutes at the pick-up location. Customers who cancel their bookings after five minutes will be charged $6.

There are no such penalties for customers who book ComfortDelGro taxis via the phone booking system or on ComfortDelGro's booking app.

An Uber spokesman said on Thursday that the company will share more details of UberFlash later on.

He said: "We are excited about our partnership with ComfortDelGro to improve the overall transportation landscape, giving Singapore more choices to move around at the tap of a button."

Following ComfortDelGro's tie-up with Uber, all 23,000 taxis in Singapore will offer a dynamic pricing option.

Since March last year, close to 10,000 taxis from the five other taxi firms - SMRT, Trans-Cab, Premier, Prime and HDT Singapore Taxi - have started offering dynamic pricing, if rides are booked through the Grab app. 

Singapore University of Social Sciences transport researcher Walter Theseira said that with all cabs now offering dynamic pricing, it is likely that the average taxi fare paid during peak hours will go up, but commuters should benefit from shorter waiting times.

But whether commuters will have to fork out more than what a regular taxi charges, with peak-hour surcharges and levies thrown in, boils down to the day’s demand and supply, he added.

“If it’s a rainy day and the Singapore Grand Prix season, for example, we can be certain that fares will be higher, but on another day, when the weather is good and everyone takes public transport, fares could be lower,” Professor Theseira said.

While metered fares offer transparency to commuters, the algorithms used by ride-hailing apps in dynamic pricing do not.

Prof Theseira said: “To protect consumers, regulations will have to evolve, to perhaps stipulate some limits on dynamic pricing, or require companies to provide some back-end justification to the price surges.”

National Taxi Association executive adviser Ang Hin Kee said that under the dynamic pricing system, taxi operators need to ensure that cabbies’ takings are not adversely affected.

Mr Ang said: “If the taxi rental rates are high, and fares are low, drivers may feel it’s a bad deal and not want to do the Uber jobs. The difference between UberFlash fares and the metered rates may need to be topped up through incentives or subsidised with lower rentals.”