TAXI SURCHARGES

TAXI SURCHARGES

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(Criteria for increase): **

41.

Dr Lim Wee Kiak asked the Minister for Transport (a) what is the criteria for the approval of surcharges by taxi operators; (b) for the past three years, how many applications for surcharges were received from taxi operators; and (c) on average, how much do these surcharges, including ERP charges, make up as a percentage of taxi fares.

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Mr Raymond Lim Siang Keat: Taxi fares have been deregulated since September 1998. The Public Transport Council decided to do so to provide taxi companies with the flexibility to set fares to meet the varying needs of commuters. Together with the liberalisation of the taxi industry in January 2003, this has allowed the market forces to determine the appropriate fare structure according to the demand and supply of the taxi services. Taxi companies are, therefore, free to introduce and make changes to taxi surcharges competitively.

Location surcharges are usually implemented at the request of the premise owner or event organiser to address the disparities of the supply and demand of taxi services at the particular location. The location surcharge can only be levied with the agreement of the premise owner or event organiser.

In the past three years, location surcharges at Resorts World Sentosa (RWS) and Marina Bay Sands Integrated Resort (MBSIR) were introduced. The CBD surcharge and time-based surcharges such as the peak-hour, booking and midnight surcharges were also adjusted in December 2007. Taxi surcharges, account for less than 20% [3] of total taxi fares today.

I would like to clarify that ERP charges are road congestion charges, and are not considered part of taxi surcharges. ERP charges are passed on directly to commuters.

The ground situation has shown that the demand for taxi services is not uniform throughout the day and across all localities in Singapore, while the supply of taxis remains relatively fixed. The pricing mechanism of surcharges provides an efficient channel to allocate these resources to meet the varying demands for taxi services.

[3] The percentage of taxi surcharges (over the total taxi fares) is derived by taking the total surcharges divide by the gross earnings of the taxi drivers. LTA’s estimation is based on data from Comfort Taxis only as the other companies are unable to give us the breakdown of the surcharges.

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