Fare surges, booking difficulties for private-hire cars and taxis due to higher demand, fewer drivers: Iswaran

SINGAPORE: The recent fare surges and difficulties in booking private-hire cars and taxis were due to a higher demand for rides as well as fewer drivers, Transport Minister S Iswaran said on Monday (Aug 1).

He was responding to a question by Member of Parliament Saktiandi Supaat (PAP-Bishan-Toa Payoh), who asked if the ministry has conducted any studies to find out the causes of the higher fares and booking difficulties.

In his written reply, Mr Iswaran said that since January 2020, the number of active taxi and private-hire car drivers has fallen by 18 per cent to about 57,000 drivers as of June 2022.

The drop is due to the lower demand for point-to-point transport during the COVID-19 pandemic. And this is despite the Government setting aside more than S$530 million for support measures such as the COVID-19 Driver Relief Fund and the Special Relief Fund, he added.

However, demand for such services has picked up sharply after COVID-19 community safe management measures were eased in March and April this year, Mr Iswaran said.

This includes the reopening of international borders and the return of all employees to the workplace.

“Daily point-to-point trips have increased by 30,000 in June 2022 compared to February 2022,” he said. “However, the number of point-to-point drivers has not increased as rapidly as demand, and this has resulted in fare surges and booking difficulties.”

He added that it will take time for the sector to adjust to the surge in demand after COVID-19 restrictions were lifted.

“We are seeing signs that the market is responding,” he said. “Vocational licence applications have increased recently, and some drivers who left the point-to-point sector may progressively return in response to the higher demand.

“These will boost the supply of point-to-point drivers in the upcoming months.”

In May, CNA interviewed customers who complained of fare surges and longer waiting times for ride-hailing and taxi services, particularly during peak hours.

According to the Land Transport Authority’s statistics, the number of taxi and private-hire vehicle drivers has decreased over the last two years. Last year alone, the number of valid private-hire car driver vocational licence holders dropped from 56,121 in January to 48,523 in December.

Private-hire companies also said they had started to implement initiatives to attract more drivers, including incentives for drivers who travel further for pick-ups. 

However, a spokesperson for ride-hailing service Grab said the shortage of drivers is an industry-wide trend. It previously told CNA that some drivers became "inactive" due to a lack of passengers over the last two years of the pandemic. 

On Monday, Mr Supaat also asked if the ministry will consider liberalising current regulations limiting private motor cars to two paid carpooling trips a day.

To this, Mr Iswaran said carpool trips are incidental and non-commercial in nature.

“As private car owners typically take two trips a day – to and from home, the current regulatory regime allows private car owners to charge at cost-recovery basis for up to two trips a day,” he said.

“We have no plans to change this limit as existing avenues, such as the point-to-point framework, are in place for drivers to provide ride-sharing services which are commercial in nature.”