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Broker's take: OCBC sees level playing field for ComfortDelGro amid fare shake-up
OCBC Investment Research on Monday said it expects a level playing field for Singapore's largest taxi operator ComfortDelGro, following the regulatory nod for taxi companies to adopt a flat fee structure.
"The move by five other taxi companies operating more than 10,600 taxis in total to partner Grab to offer dynamic pricing fare option through the new JustGrab function in the Grab mobile app will greatly dilute the market for GrabCar drivers with the influx of taxis offering same fares," the brokerage said.
"We believe this move will further level the playing field between taxi companies and private hire car service providers by closing the gap between the different fare structures, increasing its ability to retain existing hirers."
The brokerage expects an increase in dividend yield over time as ComfortDelGro receives cash from the sale of bus assets to the Land Transport Authority. It kept its "buy" rating on the stock, with an unchanged target price of S$2.95.
Shares of ComfortDelGro were down one cent at S$2.51 as at 10am.