SINGAPORE - Local car-pooling and ride-hailing company Ryde has received a warning from authorities after it said on Wednesday (August 15) that it will launch an on-demand delivery service.
Ryde wants to start the service RydeSend on Sept 3 and tap on its pool of 60,000 drivers to courier small packages and items for its app users. But the Land Transport Authority (LTA) said that private-hire drivers are not allowed to do such delivery jobs.
The LTA also said that Ryde did not consult them prior to launching RydeSend.
"We have warned Ryde that its proposed RydeSend service would contravene the regulations prohibiting Public Service Vehicles such as taxis and private hire cars from solely conveying goods. Drivers accepting such jobs may have their vocational licences revoked," an LTA spokesman said.
Under law, taxis and private-hire cars are meant to carry passengers for hire and reward, LTA added.
More than a fifth, or about 12,000, of Ryde's drivers are private-hire chauffeurs who have signed up to ferry passengers under its RydeX service. The remaining are private drivers who carpool with other users on a non-commercial basis.
While Ryde's initial statement said its new service will tap both groups of drivers, its chief executive and founder Terence Zou told The Straits Times later that it will "engage with the authorities to see how private-hire drivers can be allowed to do courier jobs".
The National Private Hire Vehicles Association's executive adviser Ang Hin Kee said private-hire drivers are discouraged from doing delivery jobs, and expressed disappointment that Ryde had wanted to rope in these drivers.
But Mr Ang, who is also executive adviser for the National Taxi Association, reiterated a call he made last year for the LTA to review the current regulations as there is excess capacity during off-peak hours, and cabbies and private-hire drivers could have an extra income source by doing deliveries.
Mr Ang, MP for Ang Mo Kio GRC, also warned that private drivers who do courier services without proper insurance may have their coverage voided in an accident.
Asked why Ryde was entering the courier sector, Mr Zou said the firm has a pool of drivers, a cashless payment system in place and "live" tracking of cars on the app, and these give synergies.
RydeSend goes up against other on-demand courier apps, including Lalamove, GoGoVan and CarPal, which have been disrupting the traditional delivery market in Singapore in recent years.
Packages that can be delivered by RydeSend's cars can measure up to 70cm by 50cm by 50cm, and weigh up to 20kg. Charges will be based on Ryde's RydeX private-hire car fares but with an additional surcharge of $6.
For example, it will cost $15.70 to send a package from One Raffles Quay to ION Orchard during off-peak hours.
Like RydeX charges, RydeSend's rates will fluctuate based on demand and also cost more during peak periods, Mr Zou said.
From Sept 3, Mr Zou said Ryde will also sign up motorcycle riders for RydeSend, and he targets to have 20,000 of them on the platform by the fourth quarter of this year. Charges will be 20 to 30 per cent cheaper, but the items to be delivered will also be smaller.
Associate Professor Lawrence Loh of the National University of Singapore Business School said: "We are now witnessing a trend where ride-hailing providers are encroaching into related business areas like courier service."
Prof Loh said that unlike courier firms, ride-hailing companies like Ryde already have a pool of drivers and vehicles which may be in various locations on the island.
"The business model is less about (delivery) scheduling than a more dynamic allocation of resources... The ride-hailing providers come from a totally different entry point and this will be their strategic advantage in the new competitive landscape," he added.