Premier Taxis to raise peak-hour booking surcharge

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Premier Taxis, the third smallest of seven taxi operators here, will raise its peak-hour booking surcharges by a dollar to S$4.50 beginning September 1. The move is a departure from previous taxi fare hikes which were mostly led by the dominant operator, ComfortDelGro.

Premier currently charges a booking fee of S$3.50 for its normal silver cabs during peak periods, higher than the S$3.30 larger operators like ComfortDelGro, TransCab and SMRT Taxis levy on commuters. Peak periods are stipulated as between 6am and 9.30am on weekdays, excluding public holidays, and between 6pm and 12am every day.

In recent fare revisions - the last overall adjustment was in December 2011 - market leader ComfortDelGro would usually be the first to take the lead, before smaller operators follow suit. In May, ComfortDelGro had increased fares for its limousines, a move which was soon followed by TransCab and Premier for their Mercedes cabs.

Responding to TODAY's queries, Premier's Assistant Vice-President for Fleet Operations Melvin Ng said the move to increase peak-hour booking fees was to encourage taxi drivers to take up call-booking jobs.

He said: "As per any other industry, product prices are adjusted for supply to meet demand. Indeed, there is a shortage of taxis during peak period mainly due to passengers’ travelling pattern and taxi availability. The price increase is to encourage the supply of taxi services."

As of last month, there were 2,132 Premier cabs - out of a total of 27,707 taxis - plying the streets, according to the Land Transport Authority (LTA). The other taxi operators - ComfortDelGro, TransCab, SMRT and Prime - declined to comment or failed to reply by press time when asked if they would follow Premier’s move in raising surcharges.

In March last year, Premier Taxis Managing Director Lim Chong Boo had voiced concern about the higher costs his firm would incur, as it sought to meet the higher standards and new requirements set by the LTA. Operators must meet three new requirements in order for it to secure or renew its licence, and these include equipping their taxi fleet with technology to identify which taxis are near a caller. And, among the new standards imposed last year, the percentage of despatched calls that are successfully matched with taxis must also go up.

Asked if Premier was raising surcharges to meet rising operational costs, the company reiterated that it was "in line with demand by commuters and supply of taxis services".

Premier cab drivers TODAY spoke to expressed concern that a smaller taxi operator like Premier may be further disadvantaged by the price hike. One driver, who wanted to be known only as Mr Loke, pointed out that pricier booking fees may lead to more customers boarding available taxis they spot on the roads, instead of waiting for their booked taxis to arrive.

Dr Park Byung Joon, who heads the Urban Transport Management Programme at SIM University’s School of Business, felt that, unless other taxi companies follow suit and raise their surcharges, the S$1 increase in booking fee may actually decrease demand for taxi booking for Premier Taxis.

"However and, ironically, if the number of phone calls for taxi booking is decreased during the peak hour, it may help Premier Taxis maintain its performance in meeting the Quality of Standard for call answer rate and cater rate imposed by LTA," he said, noting that one of the reasons for the non-renewal of Smart’s taxi licences was its failure to meet the cater rate standard — the percentage of calls that are successfully matched with taxis.

Dr Park felt it is perhaps time to look into setting up a common call centre for small cab companies. "Smaller taxi companies may find it harder to meet cater rate standard. It is perhaps time to look into an industry-wide solution to help smaller companies to meet the cater rate standard, such as establishing a common call centre," he said.


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