While some regulation of third-party taxi booking services is necessary to protect commuter interest and safety, Transport Minister Lui Tuck Yew said a light-touch approach will be adopted in how the Government regulates such service providers operating here.
He said this yesterday before Parliament approved a Bill making it necessary for third-party taxi booking services that have more than 20 participating taxis, to register with the Land Transport Authority (LTA) in order to operate in Singapore.
The law requires the service providers to adhere to guidelines such as specifying fares and surcharges to commuters upfront, dispatching only licensed taxis and drivers, and providing LTA with live data on bookings.
Flouting the rules can lead to fines of up to $100,000, suspension or having licences revoked.
"The proposed regulatory framework balances the need for consumer protection with the flexibility needed for innovation in the industry, so that these services can enhance the provision of taxi services in Singapore, and ultimately benefit both commuters and taxi drivers," said Mr Lui.
During the debate on the Bill, Non-Constituency MPs Lina Chiam and Gerald Giam questioned the need to regulate service providers. Both believed the market should decide whether a business was viable or sustainable.
The proposed law "deviates from the concept of free market", Mrs Chiam said, adding: "What LTA should be concerned (about) is the safety of passengers who use the taxi booking apps. It should not be concerned whether or not the company is able to financially sustain itself... or whether taxi booking services are 'reliable and efficient'."
Said Mr Giam: "In regulating third-party service providers, the Government should focus more on maximising benefits to consumers and taxi drivers, and less on protecting a particular business model or existing taxi operators."
Others like Ang Mo Kio GRC MPs Seng Han Thong and Ang Hin Kee asked whether the regulations went far enough to protect drivers and ensure that service providers treated them fairly.
"How do we ensure that third- party booking operators are held financially accountable?" Mr Ang asked.
Such providers do not have huge investments in vehicle fleets that can be held financially liable.
Drivers told him of late payment of fares and they also worry that such operators could exit the market with little warning.
He and Mr Seng also voiced concern about chauffeured vehicles and private limousines which compete with taxis because of the third-party booking apps - many of which offer both services.
Mr Lui said there are existing regulations to govern chauffeured vehicle services. They must be pre-booked and cannot be hailed.
Third-party providers must clearly distinguish between such services and taxis.
Mr Lui said the points raised by the MPs illustrate why some regulation is needed. "While we want to try and keep the market competitive (and) we don't want to over-regulate... there has got to be certain minimum thresholds before we allow some of these operators into the system," he said, adding later: "It is no good for the taxi industry in Singapore if we just let any and every applicant... into the market."