In the latest round of figures released by Land Transport Authority (LTA), Comfort DelGro has seen its taxi fleet reduced sharply in recent month.
Today reported that there were 15,472 Comfort and CityCab taxis in CDG’s fleet, compared with 16,495 in January 2017.
This figure represented the 7th consecutive month of decline and is a 10 percent drop from the peak of 17,143 in April 2016.
Rough times ahead for Taxi Industry
The Singapore taxi population has declined by almost 7 percent since the start of the year to hit the lowest number in more than 7 years. The competition brought about by the ride-hailing companies have disrupted the taxi industry and changed consumer behaviour. Beside dangling promo codes for riders week in week out to get rider onboard, both Uber and Grab have offered huge incentives for taxi drivers to convert to become a private-hire driver.
Grab recently offered a massive rental discount for Comfort Delgro Taxi Drivers shortly after it was announced that Uber and Comfort Delgro were in discussion on a potential alliance. Despite the talks of a potential alliance, Uber has also been offering big sign-on bonus and savings through its Lion City Rental Suresave Rental Rebates Program. Both firms are heavily funded by venture capital investors and are flexing their financial powers to oust Comfort DelGro as the big brother of the transportation industry even if they are making losses in the short run.
What is Comfort DelGro doing
Comfort DelGro shares prices have continued to take a tumble and crossed the $2 mark for the first time in the last 3.5 years of trading. Investors had shunned the stock after negative news repeatedly plagued the company. Comfort DelGro were also involved in an earlier controversy where they send out a message to their drivers to sabotage private-hire drivers picking-up riders from taxi-stands.
Comfort DelGro may be actively reducing their fleet size as more than 1500 to 2000 drivers were reported to be interested in signing up with Grab. The mass exodus of drivers will further heighten the unused taxi rate and in turn reduced profitability. Thus, it makes sense to reduce the excess inventory of taxis and diversify to other business activities.
Should you make the switch
The future for the private-hire industry looks bright and rosy. However, many people are not aware that there are still many differences and issues that surround the industry. Are you aware that income tax liabilities is vastly different for a private hire driver?
Read more on Private-Hire vs Taxi Driver to know more.