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Market players welcome LTA regulation of third-party taxi apps (Amended)

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Singapore's Land Transport Authority (LTA) on Friday introduced a basic regulatory framework for third-party taxi-booking apps, in the latest move by a government to regulate such services that observers said have disrupted the taxi industry globally.

Singapore

SINGAPORE'S Land Transport Authority (LTA) on Friday introduced a basic regulatory framework for third-party taxi-booking apps, in the latest move by a government to regulate such services that observers said have disrupted the taxi industry globally. The new rules - designed to "safeguard commuter safety and interests" and expected to come into effect by the second quarter of 2015 - were welcomed by all four major players here: Malaysia-based GrabTaxi, Rocket Internet-backed Easy Taxi, San Francisco's Uber and the most recent entrant, Hailo.

"Hailo's gameplan has always been to constructively disrupt Singapore's taxi booking and payment status quo through technology and partnership . . . within the legal framework," Hailo Singapore told The Business Times. "The current regulatory environment in Singapore strikes a good balance between flexibility and consumer protection."

Launched here in October, Hailo Singapore is a joint venture between London's Hailo Network and SMRT Roads.

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Easy Taxi, the Brazil-based platform that operates in 170 cities across Asia, Latin America, Africa and the Middle East, said that LTA's framework was among the most open, encouraging and comprehensive, given that it covers a wide spectrum such as licensing, service levels and consumer safeguards. "In Peru, for example, regulations only cover the standard of the car, whether it's clean, for instance," said Jianggan Li, co-founder and managing director of Easy Taxi Singapore. "This, of course, is based on knowledge of the countries we operate in."

GrabTaxi and Uber both cheered the fact that third-party apps are now seen as legitimate and beneficial services, and hailed LTA's move as progressive and giving stakeholders clarity about the industry. Meanwhile, observers pointed out that the new regulations were unlikely to cause much chaos for these companies. For one thing, they will be required to register with LTA; all have said okay.

Moreover, that all drivers should hold a taxi driver's vocational licence is something that each company already requires.

The third regulation, that of ensuring fare-related safeguards was a suggestion raised during LTA's consultations with commuters, the National Taxi Association, third-party apps and taxi operators on the regulatory framework, an LTA spokeswoman said.

Under the framework, third-party apps must disclose all information on fare rates, surcharges and fees payable for the journey upfront, before commuters accept the dispatched taxi.

Said Lim Kell Jay, general manager for GrabTaxi Singapore: "We make it clear to commuters on our website and within the app itself that they are to pay the necessary fees as stipulated by the respective taxi companies. We do not set our own fees or fares . . . in fact, we have a very strict rule on taxi drivers who overcharge customers."

For Easy Taxi users, Mr Li said, they are allowed to select the type of taxi they want and avoid the more expensive options such as the seven-seaters or limousines. "Our booking fee remains the same across car types. We also hope that the fare structure for the same types of cars, which is controlled by taxi operators, can be aligned to minimise confusion among commuters."

To ensure that taxi services remain equally accessible to all commuters, bidding and pre-trip tipping will be disallowed. Booking fees charged by third-party apps should also not exceed those charged by taxi operators.

One clause, however, may be tricky for these apps, and that is the proposal that commuters should not have to disclose their destination as part of their bookings, due to concerns that some drivers may choose their passengers, LTA said. It has thus decided that it should be made optional for commuters to provide this information.

Will this affect bookings? Not likely, said the players, even though they urge commuters to continue sharing this information as it will encourage more drivers to accept their bookings.

When asked about Comfort and CityCab's own app (which requires commuters to specify their destinations before they can make a booking), LTA confirmed that the new regulations will extend to taxi-booking apps and call-booking services belonging to taxi operators.

Local taxi operators, which jointly manage some 30,000 registered taxis here, also backed LTA's move. SMRT, for instance, reiterated its support for such apps. "We believe we can contribute, through a partnership with Hailo, to bring Singapore customers an integrated taxi booking and travelling experience . . . and help our drivers maximise opportunities," said Benny Lim, managing director of SMRT Roads.

Uber, which has been caught up in scandal of late for outlining a vision of spending US$1 million to dig up dirt on journalists critical of the startup, lauded LTA's new regulations as "great news".

"Uber works with governments around the world to develop new regulatory frameworks that embrace new technologies that bring choice to riders, more opportunities for drivers and a higher quality transportation alternative to cities," said Mike Brown, general manager, Uber South-east Asia.

The startup's spirits were certainly not dampened on Friday night as it hosted an exclusive live performance by local band The Sam Willows to celebrate its recent partnership with music streaming service Spotify.

The original article incorrectly stated that the regulation that all drivers should hold a taxi driver's vocational licence is something that each company already requires, even for drivers of Uber's supplementary private limousine services, UberX and UberExec. Drivers of UberX and UberExec are not required to have a taxi driver's vocational license, but they are required to have a valid driver's license and specific registration and insurance in place, and must be owners or employees of licensed limousine or rental car companies. The article has been amended to reflect that.  

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