For the longest time, the taxi industry in Singapore has been dominated by established taxi companies such as ComfortDelGro. These taxi companies spend millions of dollars acquiring and building up their taxi fleet, renting them out to taxi drivers as a “subscription service”. To help taxi drivers get more jobs, taxi companies have their own service centres and taxi booking apps so that drivers can be better matched with passengers.
Over the last two years however, a new breed of company has risen to change the way taxi booking is done: third party taxi booking apps such as GrabTaxi, Easy Taxi, and Uber. Unlike established taxi companies such as ComfortDelGro, these taxi booking apps do not have any hardware infrastructure costs, as they only facilitate the taxi booking process between taxi drivers and passengers through their mobile apps.
In case you are unfamiliar with GrabTaxi, the mobile app allows you to enter your current location and flag a taxi to your pickup location. Features in the app include booking history, a live feed of where your taxi is, as well as a taxi driver review system. GrabTaxi was founded by two Malaysian Harvard Business School graduates, who officially launched the app in Malaysia as MyTeksi in June 2012. It has since been downloaded over 1.2 million times by users in Malaysia, Thailand, Vietnam, the Philippines, and of course, Singapore.
The business models for both traditional taxi companies as well as taxi booking apps are vastly different. In collaboration with DBS BusinessClass, we engaged in conversation with taxi drivers, commuters, resident DBS BusinessClass Advisor Dr Anton Ranvindran, and General Manager of GrabTaxi Singapore, Lim Kell Jay, to discover which model is more beneficial to the ordinary commuter.
Other than hearing from taxi drivers and real passengers, some of the interesting things we uncovered include the fact that the Singapore taxi industry is still vastly under-optimized, as compared to countries such as Hong Kong: In Singapore, approximately 28,000 taxis make 900,000 rides each day. In Hong Kong, however, despite there being only 18,000 taxis on the road, 1,000,000 rides are made per day.
Here’s the video:
Curious to try out a taxi-booking service? GrabTaxi is offering all DBS BusinessClass members who are first-time users of GrabTaxi $3 off their first three rides. To redeem the promo, simply download DBS BusinessClass App and head to the “Old vs New: The Great Taxi Debate” topic. Promo valid till 31 Mar ‘2015, or for the first 2,000 redemptions.