SINGAPORE – Temasek-owned transport operator SMRT Corp is merging its taxi business with newly sold Premier Taxis to form Singapore’s second-largest cab operator with a fleet of around 2,500 taxis.
Premier, once owned by the scions of the Chua family, which started Mercedes-Benz dealer Cycle & Carriage more than 100 years ago, was sold to vehicle trading group Carros Project Management in August 2022 for an undisclosed sum.
Carros is part of property developer BS Capital.
SMRT, which was reported to be in talks to sell its taxi business to ride-hailing firm Grab in 2017, had 1,537 taxis as at end-February. Its taxi and private-hire businesses now operate under the brand name Strides.
Premier had 965 cabs as at end-February.
ComfortDelGro, Singapore’s largest taxi operator, has 8,741 cabs. Trans-Cab has 2,171 taxis.
In an announcement on Thursday, SMRT said Strides Taxi and Strides Automotive Services will be merged with Premier Taxis and Premier Automotive Services to create Singapore’s second-largest taxi operator “with a significant presence in the point-to-point transport industry”.
A new joint venture company, Strides Premier, will be formed, with Strides Holdings having a majority stake in Strides Premier, and Premier Corp and BS Investors, a property investment holding company, jointly holding the remaining stake. SMRT did not elaborate on the exact percentage each side holds.
The Straits Times understands talks between SMRT and Premier have been going on for a number of years. When Carros made an offer that was higher than SMRT’s, Premier was sold to it. Carros then resumed talks with SMRT eight months ago.
Mr Ang Wei Neng, chief executive designate of Strides Premier, said: “This merger is a significant milestone to help drive greater efficiency and better services for both our vehicle hirers as well as end-users.”
Singapore’s taxi industry has been decimated by ride-hailing firms, which entered the country a decade ago. There are now fewer than 14,000 taxis on the road, less than half the fleet size in 2012. To counter the business erosion, all taxi companies here have ventured into the private-hire vehicle sphere.
SMRT reckons demand for taxis and private-hire cars is rebounding to pre-pandemic levels.
In March, Senior Minister of State for Transport Amy Khor told Parliament that the number of point-to-point transport trips recovered in 2022 to about 80 per cent of pre-pandemic levels.
Mr Raymond Ng, founder of BS Capital Group, said: “After acquiring Premier Taxis last year, we see this merger as an opportunity for further growth.”
SMRT said all current rental agreements with drivers will not be affected by the merger.
Commenting on the merger, former MP Ang Hin Kee said market contestability works only when competitors are of equivalent competing sizes.
“Having many players does not necessarily result in better outcomes for drivers or commuters. For instance, every operator needed its own general manager and management team plus office space – all these are costs that add up,” said Mr Ang, who is adviser to the National Taxi Association and National Private Hire Vehicles Association.
“We have seen a shrinking in the number of operators over the last few years, with economies of scale becoming more relevant to operators which remain,” he added.
“Hopefully, such consolidations will translate to lower operating costs and lower rentals.”
