The embattled taxi industry, which has been reeling from disruptors such as Uber and Grab, is facing another blow – sharply higher government fees.
The Land Transport Authority (LTA) has told operators that their operating licensing fee will rise from 0.1 per cent of gross revenue to 0.2 per cent this year, and then to 0.3 per cent next year.
This is the first such increase in more than 10 years.
For a mid-size operator such as SMRT, the fee hike translates to more than $1 million in additional costs per year.
Based on its taxi revenue for the past two financial years, its fee would go up from an estimated $1.4 million to $4.2 million next year, assuming revenue remains constant.
Operators contacted were furious but resigned. “What can we do?” the manager of a small firm said. “It’s not as if the rate is negotiable.”
Another said: “That’s a doubling and trebling of fees in just two years. We’re going to appeal. It may be useless but we have to register our protest.”
The LTA was not available for comment but The Straits Times understands that the fee hike has to do with higher costs associated with monitoring taxi service standards.
Currently, private-hire operators such as Uber and Grab do not pay this fee. Their service standards are also not monitored by the LTA.
National Taxi Association executive adviser Ang Hin Kee said operators may pass the cost on to drivers by raising rental fees. “Higher cost may trickle downwards,” he added.
For cabby S.C. Wong, it is already starting to trickle down. Mr Wong, 64, said ComfortDelGro has been trying to persuade him to swop his Hyundai Sonata for a costlier Hyundai i40 cab.
“I refused because it costs 30 per cent more. The market is very bad now,” he said.
“My takings have fallen by 20 per cent to 30 per cent from last year, when Uber and Grab started full swing. My call bookings have dropped too.”
Mr Wong, who has been driving a taxi for 15 years, said the i40’s higher flagdown fare of $3.70 – 50 cents higher than the Sonata’s $3.20 – “cannot cover the $30 increase in rental”.
ComfortDelGro said the higher rental reflects the higher purchase price of the i40.
The i40’s rental is $130 a day while the Sonata’s is as low as $100. This means ComfortDelGro rakes in nearly $88,000 more in rental per cab over its eight-year lifespan.
But Singapore’s biggest cab operator is also trying to woo cabbies who have quit with a two-month 50 per cent rental discount.
Industry players said the percentage of unhired cabs has risen – from single digits before 2013 to more than 10 per cent now for some operators.
christan@sph.com.sg
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