The supply of drivers of taxis and private-hire cars in Singapore has increased recently, while passenger demand has not gone up as much, leading to the earnings of those plying the roads to be moderated, Senior Minister of State for Transport Amy Khor said in parliament.
Supply outstripped demand
Over a one-year period from the second quarter of 2023 to the second quarter of 2024, the number of active private-hire cars and taxis rose by 8 per cent, but the average daily number of passenger trips increased by only 1 per cent, it was revealed.
Khor was responding to questions about the point-to-point transport sector on Sep. 10, including questions about supply and demand and the sector's long-term sustainability.
Fares back to 2022 levels
Point-to-point fares are now back to levels seen in the first half of 2022, she said.
The average surge prices and net ride-hail fares peaked at the start of 2023 and then declined in the first half of that year.
Seasonal earnings
Khor said fares are also subject to seasonal fluctuations in demand, where higher demand from locals and visitors and higher fares were seen during the Taylor Swift and Coldplay concerts, which were major events, as well as during festive periods.
She added that demand tends to decline during the school holidays as many Singaporeans travel overseas.
Authorities do not set fares
Khor noted that the authorities observe the sector, but do not set fares, as pricing is left to operators and market competition.
This means the authorities "do not cap the number of P2P (point-to-point) drivers" and allow supply and demand, and prices, to be set by market forces.
The appropriate level of supply for the sector depends on commuter demand and the fares they are willing to pay, she said.
Drivers earnings dipped 30 per cent
She added that a dip in earnings needs to be taken “into context”, saying that there are periods of high demand, such as at the end of the pandemic in 2022, in response to a question on her ministry's views on supporting drivers during low fare periods.
Desmond Choo, a Member of Parliament (MP) for Tampines GRC, said some drivers reported that their earnings have dropped by over 30 per cent in the past six months.
Khor also said the Land Transport Authority (LTA) will continue to look at ways to reduce operating costs, such as extending the statutory lifespan for taxis, a move announced earlier in 2024.
She also pointed to various government programmes to support drivers considering alternative forms of employment.
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