Two days ago, Parliament approved a Bill mandating third-party taxi booking services to register with the Land Transport Authority (LTA) in order to operate in Singapore.

It is supposed to ensure service providers follow guidelines such as being upfront about fares and surcharges, using only licensed taxis and drivers, and sharing bookings live data with LTA.

The good news is, it looks like third-party taxi booking apps like Hailo, Uber and GrabTaxi are here to stay. The even better news is that incumbent taxi operators will be forced to provide better services if they hope to retain taxi-booking revenue. The question is, will taxi companies innovate, or will they lobby regulators to protect their revenue streams?

The fate of taxi companies will be a discussion for another day. Here are 5 ways taxi-booking apps can use technology to improve transportation forevermore:

1. Carpooling with taxis

This is a not-so-distant dream, in fact, LTA had previously tried to implement something similar at taxi stands a few years ago. Technology was not available to make taxi-pooling feasible back then. But now, with third-party taxi booking apps, taxi-pooling is not that difficult.

In fact, Uber has announced that it would be launching UberPool in August.

Simply put, you can half your taxi fare by using third-party taxi booking apps to locate someone who wants to travel to the same area. Beyond the immediate cost savings, more taxis are freed up to ferry more passengers especially during peak hours; that also means shorter wait times for commuters. It costs about $20 to $25 from town to Clementi during peak hour, wouldn't it be awesome to half that amount?

2. Dynamic pick up

Imagine you want to get from Tiong Bahru to Queenstown, with no free taxi in sight. The twist is, many of these taxis are actually headed in the same direction. With the help of technology, these taxis can pick you up. People may ask what the reward is for the passenger already in the taxi. How about having their trip subsidised by the new passenger?

The taxi-driver benefits by extending the amount of time he has a fare-paying customer on board. If he's lucky, he will be constantly picking up and dropping passengers off without having to hunt the streets in an empty taxi.

3. Killing off the flag down model

People flagging taxis by the roadside do not provide data, but if they were to use an app to book a cab while waiting in the comfort of the void deck, resources can be better planned and allocated.

The current model of flagging taxis and putting a premium on booking taxis is an inefficient way of operating a taxi business. Taxis and commuters currently have no 'big data' knowledge of each other, and taxis are plying the roads wasting time and fuel looking for a fare. Commuters are also standing on the roads wasting time trying to flag down empty taxis which may be non-existent in their area.

With the rise of taxi-booking apps providing data on commuter/taxi locations, commuter travel habits and patterns, the data generated can be put to good use. The logical conclusion would be for the rise of a booking-only model for taxis where the right taxis can be matched with the right commuter to ensure the most efficient outcome.

4. Replacing personal private transportation

Owning and running a car is expensive. Taxi-booking apps tried to solve this problem in two ways - Giving owners of personal cars an alternative income stream; and make taking the taxi a cost-efficient alternative to private transportation.

It would seem, for the moment, that the Government is not too keen to give personal car owners the ability to monetise their rides, though I would argue that carpooling is a small step towards a greener Singapore.

For the second approach, from the three points above, using data and technology can reduce the cost for commuters (in terms of sharing fares), for taxi-drivers (less fuel wasted on hunting for fares, more time spent earning money) and for taxi companies (shutting down their inefficient booking systems).

But the third cost-savings will be the biggest hurdle to cross. Current taxi-booking systems are a source of revenue for taxi companies and they would loathe to give it up to third parties. Even the thought of taxi-pooling which may reduce the number of paying customers, which in turn may lead to a reduced taxi population (i.e. lesser taxi rent to collect) will scare taxi companies.

The more optimistic view is that taxi-booking apps can make taking the taxi a new norm for people reliant on private transport or even buses and trains; and there will potentially be more demand for taxis and more rental income for taxi companies.

 5. Prelude to driver-less cars

Several companies including Google and Tesla have been experimenting with driver-less cars. The only problem for them now is the lack of commuter travel data to make driver-less cars efficient in transporting large numbers. In a way, third-party taxi booking apps, with the data they collect, will be the first piece of the puzzle to the day personal transportation is fully automated. It would be a waste for Singapore, which hopes to be a Smart Nation, to miss out being on the first wave of this.

Related article:

8 doable ideas that will drastically improve MRT travel forevermore

Top image from Taxi Singapore

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