Surge pricing approved for Singapore taxi companies

Nicholas Yong

The Public Transport Council (PTC) and the Land Transport Authority (LTA) have approved proposals from taxi companies and ride-hailing app Grab to implement surge pricing in the form of flat fares for trips booked via mobile applications.

In a joint media statement, PTC and LTA said: “The companies have informed LTA and PTC that this will be introduced as an additional option for commuters to book a taxi, on top of the current metered fare taxi bookings. We have no objections to the proposals.”

Just like private hire cars booked via Grab and Uber, the cost of a taxi trip booked through a mobile app will vary according to demand. Peak hour trips will cost more, while off-peak trips will cost less.

Separately, SMRT Taxis has inked an exclusive partnership with Grab to enable all SMRT taxi drivers to use Grab as the only ride hailing app for taxi bookings. Both companies are also collaborating to offer customers dynamic fixed fares for taxi trips booked via Grab. This lets customers know the fare for their intended trip before the start of the journey.

According to a Grab spokesman, “Dynamic fixed fares are displayed upfront, and already accounts for travel time, distance, booking fees, and real-time demand and supply for taxis. SMRT taxi drivers who accept bookings via this new Grab service enjoy fixed, competitive fares for their service.”

Metered fares continue to apply for street-hail pickups as well as phone and GrabTaxi bookings.

Managing Director for SMRT Taxis and Private Hire Services, Tony Heng, said: “The market has evolved and matured significantly, and more customers are now open to having dynamic fixed fares for their taxi rides. This partnership with Grab allows us to keep the pricing for our services competitive, catering to different customer needs and preferences.”

Melvin Vu, Head of GrabTaxi Singapore, added that Grab has been engaging the authorities since December on implementing dynamic fixed fares for taxis. “The current taxi fare model does not account for real-time passenger demand and driver supply, which often means that passengers pay a surcharge even when there are many available taxis within the vicinity. Dynamic fixed fares ensure that taxis are better utilised throughout the day and passengers enjoy more affordable rides based on real-time market demands, while not eliminating metered fares.”