‘Commuters will have more choice’ if flexible taxi fares are introduced

SINGAPORE — Even if the taxi operators’ requests to introduce new ways of charging commuters — such as surge pricing — are accepted by the authorities, commuters will still be able to pay metered fares when they book taxis, while flag-down rides will not be affected, said Second Minister for Transport Ng Chee Meng yesterday.

He was responding to the debate over the operators’ plans to implement dynamic pricing for their fare structures in a Facebook post.

Last week, Prime Taxi, Premier Taxis and Transcab said they submitted their plans for dynamic pricing to the Public Transport Council (PTC), while ComfortDelgro, the biggest player here, submitted plans for a flat fare structure. PTC said it is currently reviewing the proposals.

In his Facebook post, Mr Ng noted that commuters who book their taxis through mobile apps could have one more option: They can choose the current option with metered fares, or a new option using dynamic pricing, and the rate is agreed upon before the trip begins.

“We understand that some commuters may be uncomfortable with the taxi companies’ plans. This initial reaction is not unexpected. However, those who prefer not to use this new option can still choose to pay for a booked taxi by the meter. Likewise for street-hail commuters, where dynamic pricing does not apply.”

He said that competition from ride-sharing services Uber and Grab means this “will likely keep fares reasonable”, adding that the taxi operators are doing this to better compete with private hire cars, which are at liberty to increase fares during peak hours and hence earn more.

“Taxi companies should ensure that dynamic pricing improves and not worsens the matching of supply to demand of taxi services,” Mr Ng said.

Transport experts noted that an arrangement which allows for both flexible and metered fares may distort the taxi supply during peak hours for commuters.

Transport expert Dr Walter Theseira, a senior lecturer at SIM University, said: “There is no incentive for a driver to take a metered fare when flexible-fare surge pricing is in effect. The probable result will be that quality of service will be severely degraded for commuters who do not wish to pay flexible fares during surge pricing periods.”

National University of Singapore transport analyst Professor Lee Der Horng added: “The danger is that during peak hours it will be even more difficult to hail down a taxi at the roadside. If passengers reject surge pricing and still opt for the meter rate, I do not know if the driver may find reasons to reject the bookings.”

Both experts felt that the flexible fare system goes against the spirit of public service that taxis provide.

Prof Lee felt that the general availability of taxis “should be assured”, as they are part of the public transport system here.

Dr Theseira said: “If it (dynamic pricing) helps the taxi industry, that is desirable, but the LTA (Land Transport Authority) also has to consider the operational impact on commuters, particularly those who may be unable or unwilling to use dynamic pricing.”