Wednesday, December 12, 2007

Why is ComfortDelGro revising its taxi fare structure?

ComfortDelGro, the largest operator of taxis in Singapore, has overhauled its fare structure which it says will better meet the demand for and supply of taxi services at different times of the day. Flagging down a Comfort or CityCab will cost $0.30 more at $2.80. The metered fare has also been adjusted. It will cost $0.20 per 385 metres of travel for the first 10 kilometres. This will go up to $0.20 per 330 metres for journeys beyond 10 kilometres. It will cost $0.20 for every 45 seconds of waiting time. Instead of the $2 surcharge for peak hour travel, there will now be a premium levied. It will be 35 per cent of the metered fare.

And the CBD surcharge will go up from the existing $1 to $3. Many drivers are reluctant to enter the city area during the evening ERP hours on an empty cab as they are not willing to pay the charges. To provide drivers with the added incentive to do so, ComfortDelGro will give all drivers who are unable to get a passenger within 15 minutes of entering the ERP zone an ERP rebate. This is possible through the use of ComfortDelGro's Escalade and location tracking system.

For travel from midnight till just before 6am, instead of the gradual buildup in surcharge, it will be simplified to a flat 50 per cent of the metered fare. However, the booking fee during peak hours will be reduced by $0.50 to $3.50. The booking fee remains at $2.50 for non-peak hours. As an example, ComfortDelGro says a 9-kilometre trip off-peak will cost $8.40 (a 10% increase from the current $7.65) while a trip of the same distance during peak hours will cost $11.40 (a 49% increase from the current $7.65).

ComfortDelGro says the fare changes are the result of an in-depth review of the industry by the Group, which took into account suggestions and feedback from the public. The changes also took into account feedback from taxi associations, taking into consideration the higher operating costs of taxis. Also, it addressed commuters' concern on the difficulty in getting a cab in the city in the evening while encouraging call bookings to better match the demand and supply of taxis. ComfortDelGro says it will not raise rental fees for its taxis, following the fare adjustment.

The Taxi Operators' Associations, in its response, called the fare revision fair and timely. This is in view of the rapidly rising operating cost, especially the price of diesel and the increase in the Goods and Services Tax. It believes that overall taxi metre fare should reflect the operating cost of the taxi business, and the primary consideration is the income stability of the taxi drivers when fare adjustments are made. TOA urges the other taxi companies to adjust their taxi fares as soon as possible.

How will these new changes affect the consumers' hip-pocket?