Surge Pricing by Taxi Operators
Ministry of TransportSpeakers
Summary
This question concerns the adoption of dynamic pricing by taxi operators, as raised by Mr Saktiandi Supaat regarding consumer protection and price transparency. Second Minister Ng Chee Meng stated that the Public Transport Council permitted this to enable competition with private hire services while keeping metered fares as an option to prevent overcharging. He noted that operators must provide one week’s notice before implementation and that market competition would naturally regulate fares. For needy families facing price surges during emergencies, the Minister advised calling an ambulance for critical cases or using traditional metered bookings. He concluded that industry adaptation to competition would ultimately drive better service delivery for all commuters.
Transcript
10 Mr Saktiandi Supaat asked the Minister for Transport (a) what is the Ministry's position on the practice of taxi operators adopting surge pricing during off-peak hours to reflect market demand; (b) what can it do to prevent overcharging; and (c) how can passengers be given prior information on when the taxi companies are imposing the surge pricing.
The Second Minister for Transport (Mr Ng Chee Meng) (for the Minister for Transport): Mdm Speaker, several taxi companies had applied to the Public Transport Council (PTC) to implement dynamic pricing. They felt they had to make this move in order to compete against private hire car services like Uber and Grab. The PTC was conscious that some commuters are uncomfortable but, on balance, allowed it.
We should not prevent the taxi industry from adapting to meet stiffer competition. Livelihoods are at stake and the competition will drive the industry to deliver better services to commuters. Moreover, under dynamic pricing, it is not certain how fares will trend. Fares can potentially be higher during peak periods, but also lower during off-peak periods. Competition with fast-growing private hire car services will also keep fares in check. Metered fares will remain an option for commuters booking a taxi ride, if they are not so comfortable with dynamic pricing.
The taxi companies are required under the law to give commuters sufficient notice, at least one week, before commencing dynamic pricing. Grab had announced on 22 March their plans to implement dynamic pricing, which happened on 29 March, and ComfortDelGro had announced their plans on 17 March.
Mr Saktiandi Supaat (Bishan-Toa Payoh): Mdm Speaker, I would like to thank the Minister for the answers. I am glad that the Minister mentioned that he needs one week's notice from the taxi operators.
I just have one supplementary question. It is good that there are positive benefits from the surge and dynamic pricing. But let us, say, an example of a scenario where the prices surge in one day because of a certain event or activity. What would be the implications for a needy family, for example, which needs to send a family member to a hospital for urgent treatment especially at that particular moment when there is an extreme sharp jump in prices? Does the Ministry take that sort of situation into consideration, especially for needy families?
Mr Ng Chee Meng: I thank the Member for the question. If it is really a critical situation, my advice would be to call an ambulance. That is the best way to get to treatment fastest. But if it is not a critical emergency, then traditional options like street hails, bookings via apps on a metered fare basis still available. So, even when there is surge pricing, there are other traditional options available for any family that may have an urgent need.