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LTA warns of ‘sham’ employment by firms hiring private-hire drivers who are PRs

SINGAPORE — The authorities are looking into possible “sham” employment arrangements where firms charge monthly fees to private-hire car drivers who are permanent residents (PRs) in return for employment letters they need to keep working as drivers.

The Land Transport Authority said it will not tolerate 'sham' employment arrangements for private-hire drivers.

The Land Transport Authority said it will not tolerate 'sham' employment arrangements for private-hire drivers.

SINGAPORE — The authorities are looking into possible “sham” employment arrangements where firms charge monthly fees to private-hire car drivers who are permanent residents (PRs) in return for employment letters they need to keep working as drivers.

Checks by TODAY indicate that in some cases, the drivers may not be required to work for the firms — even though they are given these employment letters.

Under the Private Hire Car Driver’s Vocational Licence (PDVL) regime introduced in 2017, PR applicants who are drivers must be employees of a business offering chauffeured services. They must also provide a letter of employment stating that they are hired as a “chauffeured-services driver”. There is no such requirement for Singapore citizens.

Asked if it was aware that some firms were charging drivers a monthly fee, the Land Transport Authority (LTA) said it was looking into the matter and would verify documents when it processes PDVL applications.

“We will also not accept any employment letters from companies that provide ‘sham’ employment for a fee, and will also revoke the PDVL of any drivers currently allegedly employed by them,” LTA’s spokesperson said.

Some companies interviewed by TODAY provide drivers with monthly salaries and offer them work to provide limousine services as part of partnerships with hotels, on top of the trips that they take up for ride-hailing firms such as Grab and Gojek.

Other firms, however, simply charge a fee for employment letters, with no requirement that the drivers work for them.

As of last month, just over 5 per cent of 47,500 licensed private-hire car drivers here were PRs, the LTA said.


TODAY’s checks revealed that several companies providing PRs with employment letters were advertising their services on social network Facebook and online marketplace Carousell.

On Carousell, there were at least five listings for such services.

When TODAY approached these firms via messaging service WhatsApp or phone to ask about rates and the terms of employment, they requested between S$120 and S$150 a month for an employment letter, under contracts lasting six or 12 months.

Some also charged a refundable S$300 deposit.

At Kereta Rental & Services, a representative said the firm charges a monthly “admin fee”, but does not take a deposit.

While the fee is S$130, it collects S$200 from drivers each month because it pays them a S$60 wage and S$10 in Central Provident Fund (CPF) contributions.

“If LTA or any government agencies want to check your monthly payslips and CPF contributions to prove you’re an employee, you can show (them),” the representative said.

When asked if this meant that drivers could pay only for the employment letter, but did not have to fulfil jobs for Kereta, the representative said: “Yes. Many of our drivers are driving part-time and just require us to give them the employment letter to apply (for a PDVL) and maintain as a driver because (a) PR needs to be employed.”

This reporter later identified himself and asked for a response about its practices. The Kereta representative then said the S$200 sum was for drivers’ subscription to its mobile application. He said the app, which is still in its prototype stage, assigns drivers chauffeured trips, such as from Jurong to Changi Airport.

He added that drivers are required to be “on standby” for six hours each month, for which they are paid S$10 every hour. Twenty drivers have taken up these trips since the prototype app launched in January, he said. 

Another company, GM Chauffeur Service, offers an employment letter at S$150 a month (under a six-month contract) or S$120 monthly (12-month contract).

The contract covers the letter and other “consultant services”, such as how to apply for the PDVL and where to rent a car, said a representative.

The firm also takes a S$300 deposit that will be refunded after three months.

The representative said the letter is issued monthly. When asked why it could not be issued just once, he said that “monthly (issuance) is required by LTA” — the authority, though, refuted this, saying PR drivers are not required to submit letters monthly.

Meanwhile, a representative of CT Car Enterprise said the firm charges S$150 a month for an employment letter as part of a six-month contract. It also asked for a S$300 deposit that will be refunded if drivers fail to make the cut for a licence.

“You can ferry passengers however you please… We don’t control you,” the representative, who is Malaysian, said in Mandarin. He stressed that his company was “legal”.

GM Chauffeur Service and CT Car Enterprise did not reply to subsequent requests for comment. 


Other companies interviewed by TODAY said they have employment schemes for PR drivers.

AP Carz Rental, a Grab fleet partner, said drivers can take up projects, where they provide limousine services under partnerships with travel agencies and hotels.

“We pay them accordingly for these projects,” said a representative who declined to be named.

SJ Auto, another Grab fleet partner, offers a paid scheme where PR drivers operate their vehicles.

“We (pay) a fixed salary amount to them, but they have to fulfil some of our requirements that they have to drive for a certain period of time,” said Mr Kevin Low, its business manager.

When approached, Grab’s spokesperson said many PRs who wish to drive on its platform have requested help with LTA’s requirements.

“Out of goodwill, Grab will share contacts of GrabRentals fleet partners, including AP Carz and SJ Auto, whom we know offer such employment opportunities to them.

“However, Grab is not familiar with the specific and wide-ranging schemes that these companies provide. We are also not privy to the agreement that driver-partners go into with these companies,” Grab’s spokesperson added.

The ride-hailing company requests employment letters from its PR drivers when they first register as drivers, and when they ask to update their vehicle licence-plate numbers, for instance.

LTA said drivers must also produce an employment letter when they renew their PDVLs, which are valid for three years. They must surrender their licence when they are no longer employed by a company providing chauffeured services.

“Any false declaration at the time of application would render the PDVL invalid,” said LTA’s spokesperson.

Gojek did not respond to TODAY’s question on whether it was aware that its PR drivers were charged fees for their employment letters.

Its spokesperson said: “The PDVL licensing process is rigorous and one that we believe equips private-hire car drivers with good knowledge on the rules and regulations of private-hire driving as well as on service quality and safety.”


Grab driver Samiulla Sharieff, 61, a Singapore PR and Indian national, paid between S$200 and S$300 for an employment letter each month between December 2017 and March last year.

Refusing to fork out the high costs, he resigned from the firm he was with. “The charges are high and monthly payments for what? I don’t understand,” he said.

The father of three, who is also a New Zealand PR, earns an average of S$2,000 a month after deducting rent for his car and petrol.

The fee for the employment letter would have usurped about 10 per cent of his income.

He said he has to pay for the tuition fees of his sons who are in primary school, groceries and other expenses. “It is just hand to mouth,” he said.

Related topics

car drivers PR private-hire car chauffeur employment letter

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