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Singapore's Regulations On Third-Party Taxi Booking Apps And How It Affects Innovation

UPDATE: The Third-Party Taxi Booking Service Providers Act has since been implemented as of Monday, 11 May. Under the new laws, these are what third-party taxi booking services and passengers will be able to expect, according to Channel NewsAsia and The Straits Times:

  1. Providers with a fleet of taxis larger than 20 will have to register themselves with the Land Transport Authority (LTA).
  2. Service providers may only dispatch drivers with valid Taxi Driver’s Vocational Licences.
  3. No pre-tipping or bidding for taxi services will be permitted.
  4. Passengers may choose to indicate their destinations before boarding a taxi, but are not obligated to do so. This is to prevent taxi drivers from being selective about who they want to pick up.
  5. Fares and surcharges must be specified to passengers upfront.
  6. Providers will have to give LTA access to live data on bookings made via their apps.
  7. Providers offering both taxi and private limousine services must make the distinction between the 2 services (including pricing systems) clear — the latter must be pre-booked and not hailed.

The rules will apply to service providers based outside Singapore, but which provide services locally. Failure to comply with the new laws could result in fines of up to $100,000, suspension or having licences revoked.  

Yesterday, the Third Party Taxi Booking Service Providers Bill was introduced in Parliament, and if passed, will be an unprecedented step in a largely unregulated industry. According to Today, third-party taxi booking apps like Easy Taxi, Uber and Hailo might soon have to follow a set of regulations as outlined by the LTA in November last year.

Regulations include:

  • Taxi booking apps will have to register their services with LTA.
  • Taxi booking service providers will only dispatch licensed taxis and drivers holding valid Taxi Driver’s Vocational Licences, to ensure that commuters are served by legit taxis and drivers.
  • Specify upfront all information on fare rates, surcharges and fees payable for the journey, before commuters accept the dispatched taxi, to safeguard commuters and eliminate any “hidden charges”. Taxi booking fees cannot be higher than those charged by taxi companies.
  • Allow passengers to decide whether to provide destination information before they make bookings, to avoid taxi drivers “picking and choosing” passengers.
  • Provide customer support services, including lost and found services and channels for commuters to make complaints and enquiries.

The new regulations also have outlines of penalties — failing to register with the LTA can result in a fine of up to S$10,000 (US$7,335) or a jail sentence of up to six months, while sanctions of up to S$100,000 (US$73,345) could be imposed on any providers who fail to comply with the conditions set by the LTA.

Regulation’s Patchy Relationship With Innovation

Hailo Taxi

The biggest question arising from these regulations is how it will affect the taxi booking services we already patronise. At face value, the regulations in place aren’t bad regulations. In fact, they seem to be set in place to protect passengers, especially scam drivers who charge unsuspecting passengers exhorbitant prices. However, the biggest backlash could be faced by companies who are partaking in innovation that is building this industry from the ground up.

Press Event Grabtaxi

The entrance of taxi booking apps into Singapore has vastly changed the local taxi industry, pushing for innovation in a scene that has remained relatively unchanged since its inception. In response to the rise of taxi booking apps, for example, an app created by ComfortDelGro — one that used to dominate the market — has been completely revamped. GrabTaxi also recently opened their first R&D centre in Singapore, and are looking to invest USD$100 million into innovation in the taxi industry.

But will these new regulations stifle them? Uber is one of the ‘taxi’ booking services that used to clash with a country’s regulations in their operations. Their argument for a ‘free market’ — one that gives power to passengers to use the apps they want, however they wish — is at risk of being stifled by these regulations. They stand to lose out the most from these regulations, as they depend solely on private drivers personally vetted by the company itself, working outside the regulatory mainframe to provide more supply to meet an increasing demand.

For other taxi drivers, too, the regulation that states that a booking service is not allowed to require passengers to provide their destination could impede operations; picky taxi drivers may not be so easily ‘educated’ on the advantages of such a law. Furthermore, if requiring passengers to provide destinations is really the most efficient move for the taxi industry, we’re ruling out that possibility completely.

Image Credit: Easy Taxi
Image Credit: Easy Taxi

The regulation-vs-free-market argument is one that has long been battled out, but the truth is there are both pros and cons to a free market, and a regulatory system to consider. These regulations are clearly more skewed towards protecting Singaporeans against a volatile industry, and it’s up to the active players in the market to react in the best interests of drivers and passengers.

Yet, third-party booking apps don’t seem fazed by the possible regulations. As Easy Taxi Singapore’s Li said to Today: “Among the countries that Easy Taxi operates in, Singapore has been one of those more supportive of innovation, so we really hope that remains, even after regulations have been implemented.”

So do we.

 

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