5 March 2017
Taxi companies are planning to introduce a dynamic fare system, commonly known as surge pricing, to allow for their taxi-drivers to compete in the increasingly competitive market.
The move was initiated by Trans-Cab, the second largest operator and Premier Taxi, the second-smallest taxi operator. Collectively, they own a fleet of 6455 taxis.Singapore largest operator, Comfort Delgro, have also announced that they will be joining Trans-Cab and Premier Taxi, in applying to include surge-pricing in their fare model. Fellow taxi companies SMRT and Prime are expected to follow suit.
Although taxi fares are not regulated by the government since 1998, taxi-operators are still required to keep the Public Transport Council posted of all changes before they are implemented.
What is surge-pricing
The fare automatically increase when the demand for taxi is greater than the number of available drivers around. The pricing model is meant to encourage more drivers to get on the road to satisfy the demand of the riders.
Surge-pricing was first introduced by Uber when they began operations in Singapore. It has a bad history with many riders in Singapore. Users have complained of paying up to five times the usual fare during major MRT breakdowns, christmas eves and during days of heavy thunderstorms.
Currently, surge-pricing is being used by both Uber and Grab.
Impact on consumers
The new fare system will only apply to commuters booking a taxi through the Grab ride-hailing app.
Be prepared to pay more if you want to be on the first car out. It works the same as an air ticket; you pay for business class and you get priority in boarding and disembarking.
With an attractive surge-pricing model available on booking system only, riders can expect greater difficulties in getting a street-hail taxi. Taxi-drivers are better off waiting in the comfort of their taxi and wait for a high-priced booking than picking up a street hail that does not come with any booking fees or surge pricing.
