Considerations for Placing Cap on Private Hire Fares

Mr Gan Thiam Poh asked the Minister for Transport whether the Ministry will consider placing a cap on the fare charged for commuters of private hire cars as an incentive to make it an attractive alternative to car ownership.

Ride-hail fares for trips on private hire cars are not set by the Land Transport Authority; they are dynamically priced based on demand and supply. When demand is high, fares rise, attracting more drivers to take up jobs to meet the increased demand from commuters. Conversely, during periods of lower demand, commuters benefit from lower fares.

Capping fares for private hire cars will affect the incomes of drivers and inadvertently lead to a bad outcome for commuters. If fares are artificially capped and do not accurately reflect the demand and supply situation, there will be insufficient drivers during periods of high demand and commuters will, in turn, find it more difficult to secure rides.