SINGAPORE (Aug 12): A new licensing regime for private-hire platform operators that will kick into effect next June could level the playing field between taxi operators and ride-hailing platform providers, as well as protect drivers and consumers alike. However, some observers say the regulatory measures are broad and may need some clarity in practice. The impact will be wide: Besides the 20,000 taxis, there are about 45,000 private-hire cars on the roads today.
“The new framework seems to adopt a relatively light touch, and provides avenues to respond to industry developments going forward,” says DBS analyst Andy Sim. He is looking forward to new regulations covering accidents and service standards that will put the private-hire industry on the same level as taxis. “For instance, under the current Quality of Service standards, taxi operators have to ensure that the accident rate is not more than 0.02 per 100,000km to attain a pass,” he adds.
The new Point-to-Point Passenger Transport Industry Bill passed this week will give the Land Transport Authority (LTA) the power to set safety standards for ride-hailing platform operators. It will monitor accidents and offences of drivers on the platforms. The agency can also penalise operators through regulatory sanctions if the drivers on their platforms commit too many accidents or offences. All vehicles must undergo a yearly safety inspection. Taxis have to undergo inspection every six months.
There will be two separate licences, differentiating street-hailing operations and ride-hailing services. Operators that have at least 800 vehicles on their platform must apply for at least one licence, and they will be given the licence next June when the regulatory framework kicks in. Providers with smaller fleets will have to apply for an exemption. Those operating without a licence or exemption will face a fine of up to $10,000 or be jailed up to six months, or both. It is also an offence for drivers to use these platforms.
The Public Transport Council (PTC) will have the power to deal with cases of overcharging and those who evade fares. Licensed operators can set fares independently, but the fares must be presented upfront to consumers — something that is already in practice today.
In addition, no platform provider is allowed to secure exclusive arrangements that forbid drivers from using other platforms, reinforcing the conditions imposed on Grab by the competition watchdog last year.
The new regulations, which will give PTC and LTA more teeth to rein in the ride-hailing industry, are generally broad. “What this means is regulators will have a lot of power to shape the industry,” says Nominated Member of Parliament Walter Theseira. “They put in this broad legislative framework, which allows the [LTA and PTC] in practice to adapt regulatory policies [as] problems arise.”
One of the key issues with the regulations is the exclusivity clause. While regulations now explicitly state that ride-hailing platform operators are not allowed to sign deals with drivers that will prevent them from using other platforms, there are “grey areas such as backdoor arrangements through rental-car companies”, says Theseira.
For instance, rental-car companies may provide insurance that only covers certain ride-hailing operators. If the rental-car company is nominally an independent company from the platform operator, not much can be done, as it may not be a direct violation of the exclusivity clause.
The Edge Singapore has reported that most drivers have to work long hours almost exclusively on some platforms to meet incentive targets; otherwise, the pay would not justify the work put in. Some lawyers say this suggests a degree of control by the platforms over the drivers.
