TAXI SURCHARGE

TAXI SURCHARGE:

* 10. *Er Lee Bee Wah asked the Minister for Transport whether his Ministry will consider dispensing with the taxi surcharge and replacing it with other incentives to improve the availability of taxis during peak hours.

The Minister of State for Transport (Mrs Lim Hwee Hua) (for the Minister for Transport): Sir, the deregulation of taxi fares and the supply of taxi services in September 1998 and January 2003 respectively have allowed market forces to determine the appropriate fare structure according to the demand and supply of taxi services.

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The demand for taxi services fluctuates through the day, as Members will be well aware of. It is high in the morning and evening peak hours, and considerably lower at other times. Demand for taxis is also more concentrated at certain locations. We cannot expect taxi companies to plan their fleet size based solely on peak demand requirements. Hence, the surcharges set by the taxi companies enable taxi services to be priced differently at different times and for locations so as to strike a balance between supply and demand. Without these surcharges, the shortage of taxis during peak demand periods will only worsen.

While fares and taxi supply are left to the market to determine, the LTA ensures that taxi service standards are not compromised. For instance, to ensure that commuters can get a taxi, if they choose to phone-book a taxi, LTA has, with effect from January 2007, extended the monitoring period on taxi companies’ call booking performances from between 5.00 pm and 8.00 pm to between 5.00 pm and 11.00 pm under the Quality of Service standards. LTA also works closely with stakeholders, such as the taxi companies, taxi driver associations and building landlords, eg, shopping centres and hotels, to raise the quality of our taxi services.

Er Lee Bee Wah: Mr Speaker, Sir, I would like to ask whether the Ministry has carried out any study on the waiting time for taxis during peak hours and whether we are satisfied with the result. Is there anything that we can learn from Hong Kong, which seems to have better taxi services than ours?

Mrs Lim Hwee Hua: Sir, indeed, there are many surveys that had been carried out on all components of taxi service standards, and waiting time is one of the key factors, and that is where the surcharges come in. Ultimately, we are

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really aiming for a situation where the market demand would determine the kind of charges that commuters would be prepared to pay and whether they would decide to therefore phone-book a taxi or to wait along the street to hail. At some point, there would have to be a balance that is struck between the commuters and the taxi companies.

Ms Irene Ng Phek Hoong: Sir, it seems that presently the balance is towards phone-booking. Can I ask the Minister of State whether she can make sure that the taxi companies would improve their service so that they do not only respond to phone-booking but also to customers in the queue?

Mrs Lim Hwee Hua: Sir, the observation is a valid one. But allow me to put that in perspective. LTA's figures show that only about 10% of taxis on the streets are actually booked during peak hours. In other words, the vast majority of taxis or about 90% are still available for street hailing during peak periods, and these taxi drivers would certainly not want to miss having a fare during these lucrative business time belts.

Er Lee Bee Wah: Mr Speaker, Sir, I think MOS did not answer my question on whether there is anything that we can learn from Hong Kong which seems to have a better taxi service than ours.

Mrs Lim Hwee Hua: Sir, I believe this point was actually debated and covered during the recent COS debate where my Minister had given a thorough comparison of the Hong Kong taxi situation where, if I recall correctly, the supply of taxis is in greater proportion relative to demand than that in Singapore. Ultimately, it is again a balance that we will have to strike because one way of meeting all the needs is to have the supply at the peak period requirements. But that would mean that, during the off-peak periods, there would

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be a lot of taxis cruising the streets empty.