The embattled taxi industry, which has been reeling
from disruptors such as Uber and Grab, has taken another blow -
sharply higher government fees.
The Land Transport Authority (LTA) has told operators
that their operating licence fee will rise from 0.1 per cent of
gross revenue to 0.2 per cent this year, and then to 0.3 per cent
next year.
This is the first such increase in more than 10 years.
For a mid-sized operator such as SMRT, the fee hike translates to
more than $100,000 in additional costs per year.
Based on its taxi revenue for the past two financial
years, its fee would go up from an estimated $140,000 to $420,000
next year, assuming revenue remains constant.
Operators contacted were furious but resigned. "What
can we do?" the manager of a small firm said. "It's not as if the
rate is negotiable."
Another said: "That's a doubling and trebling of fees
in just two years. We're going to appeal. It may be useless but we
have to register our protest."
The LTA was not available for comment but The Straits
Times understands that the fee hike has to do with higher costs
associated with monitoring taxi service standards.
Currently, private-hire operators such as Uber and Grab
do not pay this fee. Their service standards are also not monitored
by the LTA.
National Taxi Association executive adviser Ang Hin Kee
said operators may pass the cost on to drivers by raising rental
fees. "Higher cost may trickle downwards," he said.
For cabby S.C. Wong, it is already starting to trickle
down. Mr Wong, 64, said ComfortDelGro has been trying to persuade
him to swop his Hyundai Sonata for a costlier Hyundai i40 cab.
"I refused because it costs 30 per cent more. The
market is very bad now," he said. "My takings have fallen by 20 per
cent to 30 per cent from last year, when Uber and Grab started full
swing. My call bookings have dropped too."
Mr Wong, who has been driving a taxi for 15 years, said
the i40's higher flag-down fare of $3.70 - 50 cents higher than the
Sonata's $3.20 - "cannot cover the $30 increase in rental".
"If I get 20 passengers a day, that's only $10 more,"
he said.
Asked what he will do when his Sonata is deregistered
in March, he sighed. "I don't know. Maybe by then, I would have
stopped driving."
ComfortDelGro said the higher rental reflects the
higher purchase price of the i40.
A spokesman said the i40 - which is slightly smaller
than the Sonata - costs more because it complies with Euro 5
emission standards.
The i40's rental is $130 a day, while the Sonata's is
as low as $100. The $30 hike means ComfortDelGro rakes in nearly
$88,000 more in rental per cab over its eight-year lifespan. The
group has about 17,000 taxis.
But even as it is piling higher rentals on drivers,
Singapore's biggest cab operator is trying to woo cabbies who have
quit with a two-month 50 per cent rental discount.
"The scheme is a promotion to attract drivers who have
left and wish to rejoin the company," the spokesman said. "This is
part of our ongoing efforts to recruit drivers."
Industry players said the percentage of unhired cabs
has risen - from single digits before 2013 to more than 10 per cent
now for some operators.
For commuters, the days of $3.20 flag-downs are
numbered. Sonata taxis will all be replaced by i40s in the next
couple of years.
A version of this article appeared in the print edition of The
Straits Times on June 24, 2016, with the headline 'Cab firms hit by
higher operating licence fees'.