Regulation of Taxi Fares

Mr Lim Biow Chuan asked the Minister for Transport in view of recent reports of taxi drivers who set their own taxi fares above the metered rate based on demand (a) whether LTA will take action against such taxi drivers; and (b) whether the Government will consider regulating taxi fares as a possible solution.

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Taxi drivers are not allowed to charge fares above that set by their respective taxi companies. LTA will take stern action against errant taxi drivers. Under the Vocational Licence Points System (VLPS), a taxi driver will be penalised with a fine of $500 and 12 to 21 demerit points depending on the amount overcharged. The driver will also be liable for a minimum of four weeks' suspension and his licence will be revoked if he accumulates 21 or more demerit points within 24 months.

Taxi fares were deregulated in September 2008 to allow taxi operators flexibility to price their services according to the cost of service provision and to respond to changes in market conditions. Regulating taxi fares would take away this market-friendly flexibility. It would also not in itself prevent taxi drivers from overcharging their passengers. Such errant behaviour would be better addressed through the enforcement actions I described earlier.

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