Limit Number of Vehicles for Private Hire Arrangements

12 Mr Gan Thiam Poh asked the Minister for Transport whether the Ministry will review and control the number of vehicles that can be used for private vehicle hire in addition to the vocational licence requirement for such car drivers.

The Minister for Transport (Mr Khaw Boon Wan): Madam, the growth of private hire car services has benefited commuters as they supplement taxi services. We will continue to monitor the situation. Our preference for now is to leave it to the market to determine the growth of the industry.

Mdm Speaker: Mr Gan Thiam Poh.

Mr Gan Thiam Poh (Ang Mo Kio): I thank the Minister for the reply. There is a public concern that if you do not control the number of such vehicles, it will actually affect the current system because, currently, taxi companies are exempted from Certificate of Entitlement (COE) bidding. So, whether it will lead to higher COE prices for private vehicles.

Mr Khaw Boon Wan: Mdm Speaker, the entire transport scene is going through major changes. I am quite certain that within the next 10 to 15 years, how we move from Point A to Point B will be quite different from what we are doing today, and from what we are more familiar with, partly because of technology, disruptive business models and rising expectations from commuters.

So, what will be the likely steady state scenario of our transport scene? It is not something that the Government can determine in a top-down approach. The best approach, I think, is to let Singaporeans, consumers and commuters, decide. For example, in this whole new space of private hire, point-to-point transport, exemplified by Grab and Uber, the whole scenario is still changing. Within three years of their introduction, our recent survey showed that Grab and Uber have grabbed half of the market share. In other words, the taxi operators' market share today is only about half. At the same time, what is comforting is that the number of taxi trips chalked up by taxi drivers has remained quite stable. There was a slight shrinkage.

What does it mean? What it means is that the whole point-to-point market has actually doubled in size after the introduction of Grab and Uber. That means that the new players have been meeting new demands or under- or unmet demands in the past. So, that is a good thing. It shows in the survey results. When consumers and commuters were asked for their opinion about new services like Grab or Uber, they rated them high and higher than taxis. What is also very comforting is that their rating on taxis has also improved and, when asked, they said it is because of competition.

So, in this particular space, competition has been good, and our approach in not stifling these new services that are being brought in because of innovative business models, is something that has been good for Singaporeans and commuters, and I would like to maintain that approach. As I said, we cannot tell how it would be like in 10 or 15 years' time. It is best that we leave it to the market, meaning leave it to Singaporeans and consumers, to decide. Our operating principle must be: does it improve services to the commuters? Does it lift the quality of life of Singaporeans? If it does, then, as a regulator, we should try to nudge it in that direction. That would be the approach I take.

As for COEs, there has been some speculation that the COE is being pushed up because of Grab and Uber. Let us look at the evidence. And the evidence does not suggest that, because when we look at the top players in this field of private hire services, the bids that they put into the COE in each cycle were more or less at the market rate. They were not being particularly aggressive.