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Rising petrol prices batter earnings of private-hire car and taxi drivers, as some consider quitting

SINGAPORE — For taxi drivers such as Mr Andy Guan, the recent announcement that all operators will be increasing their fares this month should have brought some cheer, but the reality is that it has not made much of a difference in earnings for the 40-year-old Prime Taxi driver.

Rising petrol prices batter earnings of private-hire car and taxi drivers, as some consider quitting
  • Fuel prices have been rising since tensions between Ukraine and Russia started
  • On March 10, prices hit fresh highs across the board for all fuel types
  • Some private-hire and taxi drivers said their earnings have been badly affected and it is no longer worth their time to drive as a living
  • Car owners, though, said the rising fuel prices is unlikely to make them give up driving

SINGAPORE — For taxi drivers such as Mr Andy Guan, the recent announcement that all operators will be increasing their fares this month should have brought some cheer, but the reality is that it has not made much of a difference in earnings for the 40-year-old Prime Taxi driver.

With most people still working from home due to the ongoing Covid-19 pandemic, he often finds himself plying the roads without a passenger. And now, there is something else to worry about — the ongoing war between Ukraine and oil-producing Russia.

Though half a world away, the consequence of the conflict has been felt in Singapore through fuel prices that have surged since Russia invaded its eastern European neighbour on Feb 24.

On Thursday (March 10), prices peaked across all fuel types.

For instance, 92-octane petrol cost up to S$3.16 a litre, while 95-octane petrol was going for up to S$3.23 a litre, and 98-octane petrol cost as much as S$3.72 a litre, based on figures by online price tracker Fuel Kaki, a project by the Consumers Association of Singapore.

By comparison, TODAY previously reported just over a month ago on Feb 7 that 92-octane petrol cost up to S$2.70 a litre, 95-octane petrol went for up to S$2.76 a litre, while 98-octane petrol sold for S$3.25 a litre.

Depending on the fuel type, this means that prices have risen by as much as 17 per cent over that period.

And because Mr Guan does not get any fuel subsidies from his company, unlike drivers from some other taxi firms, he said that he has to bear the full brunt of rising prices, over and above other expenses such as rental fees, as well as charges for parking and the Electronic Road Pricing (ERP) system.

He said that prior to the fuel hikes, he was paying around S$70 on average, after applying petrol station-related discounts, for a full tank of fuel.

Now, he finds himself paying around S$100 for the same amount.

This, he said, has caused his earnings to drop by at least 40 per cent, and he is feeling the pinch. Others are feeling the pinch as well.

With food, petrol, rental car costs added up, I took home around S$50 a day last time. Now, I take home about S$30 (on average).
Mr Riduwan Mohamod, a driver with ride-sharing platform Grab

Mr Riduwan Mohamod, a 49-year-old Grab driver, said that he used to pay a subsidised amount of S$30 on fuel a day before the price hike. Now, he finds himself spending about S$40 a day.

“With food, petrol, rental car costs added up, I took home around S$50 a day last time. Now, I take home about S$30 (on average).”

Mr Guan the taxi driver said that the “crazy fuel prices” would be manageable, if his vehicle were not devoid of passengers all the time.

“If there are passengers to cover the (petrol fees) with the taxi fare increases, then it’s okay, can balance out. But the crowd is not back yet. So even with a higher base fare (for taxi drivers), it’s pointless.”

Mr Azhar Ismail, another private-hire driver for Grab, made a similar observation and said that it is often a case of five cars in an area to one passenger.

“You can still earn money… but it’s a lot less. Most of (the daily earnings) go towards petrol now,” said the 56-year-old, who described a similar situation for his earnings as Mr Riduwan.

“Sometimes you think back, you're driving eight to 10 hours a day and you earn so little… no use, like that. Better you go find another job,” Mr Azhar said. He does not intend to renew his contract with the ride-hailing platform despite driving with the company for three years.

While he did not state what he intends to do next, he said that it would be better to work for a company that pays a monthly pay cheque with fixed working hours, because he thinks that it would be “less stressful” and there would be fewer liabilities.

Mr Guan said that he intends to stop driving a taxi and start doing food delivery instead. He believes that he can earn more with fewer overhead costs since he can rely on his personal mobility device.

It may result in a higher monthly electricity bill to keep the machine powered, but he does not expect the higher cost to be as drastic as paying for fuel.

Mr Riduwan, on the other hand, said that he intends to continue driving a private-hire car for now, though he will just have to be more careful about his spending.

When asked how it intends to support its taxi drivers during this period, ComfortDelGro reiterated that the firm has increased fares, which will “hopefully help alleviate some of the increased costs”.

It added that aside from offering a daily rental waiver of 15 per cent for the month of March, it will also give a one-time S$90 rental rebate on April 1 for hirers who drive for the entire month of March.

For those who do not, they will still be given a pro-rated rebate.

Ride-hailing company GoJek said that it is “monitoring the situation closely”, and pointed to a number of ongoing initiatives that the firm has for drivers to help subsidise fuel costs.

TODAY has sought comment from Grab, as well as other taxi operators.

WON’T STOP DRIVING

In the meantime, several car owners told TODAY that they do not foresee any major changes in their driving habits.

As Mr Kong Kian Siong put it, the reason for buying a car is for the convenience it provides.

We already bought the car, so we (drivers) just need to accept whatever increment there is and adapt to it.
Mr Kelvin Tay, a car owner

The 42-year-old auditor said that he does not expect drivers to stop using their cars just because fuel prices have gone up.

"I don't think the fuel costs will contribute significantly (to the overall costs of keeping a car). You probably feel (the effects of higher prices) because everybody's talking it now, but after a while, I don't think we will stop driving just because of that."

For Mr Kelvin Tay, the close to two hours he saves on the round-trip journey between his home in the east of Singapore and his workplace on the other end of the island, compared with making the trip on public transport, is worth the extra S$30 he is paying for his weekly petrol bill.

“We already bought the car, so we (drivers) just need to accept whatever increment there is and adapt to it,” said Mr Tay, who works in facilities management.

He said that this could mean shopping less or changing even his driving patterns to increase fuel efficiency.

Others, such as Mr Lucas Chiam, said that his family will still need to use the family car in spite of the heftier fuel prices because of logistical reasons.

Like Mr Tay, the 39-year-old educator said that he is more likely to change his own consumption habits than to give up driving. 

For one thing, his wife, who does business development for medical products, needs it to meet her clients across the island. 

Beyond that, the couple uses the vehicle to take their two young boys out to inexpensive places that are out of reach by public transportation. “So spending a little more on the travel to save time, energy, and have a better experience is actually worth it,” Mr Chiam said.

IMPACT ON LOGISTICS COMPANIES

TODAY also sought comment from several logistics companies to find out how the fuel hikes might affect customers.

Mr Dave Ng, chairman of the Singapore Logistics Association, said that the logistics sector expects operating costs to continue rising sharply in the short term.

“Aside from coping with supply constraints, rising wages and inflationary pressures in a Covid-19 environment, the recent surge in fuel and electricity costs due to the Ukraine conflict are compounding the difficult operating environment for logistics companies,” he said.

While logistics companies have been trying their best to cope with and absorb these cost increases across multiple fronts, the recent rounds of hefty increases in fuel and electricity costs are particularly difficult to bear, Mr Ng added.

“Inevitably, many logistics companies are reaching out to their clients and appealing for all to temporarily share the fuel increases, in tandem with the recent rounds of pump price increase across Singapore, to tide over the difficult period.” 

Be that as it may, at least two logistics companies told TODAY that they have no intention of passing on the cost to consumers in the form of high transport charges yet.

One was DHL, which said that the impact on the group's results caused by fluctuations in fuel prices is minor, and fuel costs make up only 3 per cent of its total cost base and are mainly related to its DHL Express aircraft fleet.

“DHL Express applies an automatic fuel surcharge for shipments, which is updated on a monthly basis. Also, in our other divisions, fuel price movements are automatically factored into regular freight rate movements and are addressed in customer contracts if of major relevance,” it added. 

Another company is Pickupp. Mr Lee Chee Meng, its co-chief operating officer, said that the firm is unaffected by rising fuel costs because it relies not only on those who have their own transport, but on “walkers” as delivery agents.

“As such, we have no intention to increase our prices to customers for now.” 

Related topics

fuel price transport cost of living taxi private-hire car drivers petrol

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