Singapore regulates third-party taxi booking apps

In the recent years, third-party taxi booking apps such as GrabTaxi and Easy Taxi have become increasingly popular with taxi users around the world. GrabTaxi, for example, has been downloaded over 1.2 million times by users in South East Asia alone. What sets these third party apps apart from the apps of traditional taxi companies such as ComfortDelGro are that most of these taxi booking apps do not have any vehicles of their own. They simply facilitate the taxi booking process between taxi drivers and passengers through the mobile apps.

While such apps have become increasingly popular, concerns have also been raised about passenger safety and fairness to traditional taxi drivers. The taxi community has cried foul following news of rental companies working together to run their own fleet of “taxis”. These rental firms lease out cars to drivers at a rate cheaper than taxis and the drivers then use the vehicles to fulfil bookings from apps like Uber and GrabTaxi. In addition, these companies and drivers did not have to meet the stringent vocational training requirements imposed on the taxi industry.

Implementation of the Third-Party Taxi Booking Service Providers Act

Therefore, the Third-Party Taxi Booking Service Providers Act was passed in parliament on 11 May 2015 to allow Land Transport Authority (LTA) powers to regulate taxi booking service provided by third-party companies. The Act then came into force on 1 September 2015. Then transport minister Mr Lui Tuck Yew said that the regulatory framework provided by the Act seeks to balance the need for consumer protection with the flexibility needed for innovation in the taxi industry, so that the taxi booking services can enhance the provision of taxi services in Singapore and benefit both passengers and taxi drivers.

The new regulations will also apply to third-party taxi booking services that operate from overseas, but provide services within Singapore. Under s(3) of the Act, taxi booking apps of existing taxi operators and third-party taxi booking services that have less than 20 participating taxis are exempted from the regulatory bill. Twenty is said to be a reasonable threshold, as it allows very nascent services to be exempted from registration and provide them some room to experiment before their size reaches the registration threshold. Under s(7) of the act, anyone providing an unregistered service is liable to a fine not exceeding S$10,000, or imprisonment for a term up to six months, or both. Sanctions of up to S$100,000 (US$73,345) could also be imposed on any providers who fail to comply with the conditions set by the LTA. There has not been any deadline set for these companies to comply based on the set regulatory framework, but they would be informed by LTA when they would need to comply with the regulations.

Those registered will need to disclose adequate and timely information on charges and fees. They must dispatch only licensed taxis and drivers who hold valid Taxi Driver’s Vocational Licences. Bidding and pre-trip tipping for taxi services will also not be allowed. Commuters can still choose to indicate their destinations if they think this will increase their chances of getting a taxi, but they are not compelled to do so.

Third-party booking service providers can only dispatch licensed taxis and taxi drivers if a commuter requests taxi services specifically, so the third-party booking app is prohibited from sending a chauffeured vehicle and charging chauffeured vehicle rates if a commuter books a taxi on this third-party app.

Fares and surcharges must be specified to passengers upfront and providers will have to give LTA access to live data on bookings made via their apps. Providers offering both taxi and private limousine services must make the distinction between the 2 services (including pricing systems) clear — the latter must be pre-booked and not hailed. Providers must also specify upfront all information on fare rates, surcharges and fees payable for the journey, before commuters accept the dispatched taxi, to safeguard commuters and eliminate any “hidden charges”. Taxi booking fees cannot be higher than those charged by taxi companies. They must also provide customer support services, including lost and found services and channels for commuters to make complaints and enquiries.

Future of Third-Party Taxi Booking Services in Singapore

The biggest question arising from these regulations is how it will affect the taxi booking services we already patronise. These regulations are beneficial for commuters in Singapore, especially to protect them against scam drivers who charge exorbitant prices. However, these new regulations may stifle the companies that are partaking in innovation to build this industry.

For example, Uber stands to lose out the most from these regulations, as they depend solely on private drivers personally vetted by the company itself, working outside the regulatory mainframe to provide more supply to meet an increasing demand. The time and money required for Uber drivers to take a vocational course will be an extra burden for them. For other taxi drivers, too, the regulation that states that a booking service cannot require passengers to provide their destination could impede operations; if requiring passengers to provide destinations is really the most efficient move for the taxi industry, it has been argued that this regulation rules out that possibility completely.

Find a Lawyer

View all legal services