Impact of Grab's Acquisition of Trans-Cab on Fares, Quality of Service and Drivers' Livelihoods

Mr Yip Hon Weng asked the Minister for Transport (a) how has the growth of e-commerce, ride-hailing and car-sharing impacted the number of vehicles on the road and congestion over the past three years, especially with the recent acquisition of Trans-Cab by Grab; and (b) how does the Ministry plan to adjust the COE system to address the aforementioned growth and its effects on vehicle numbers and road congestion.

My reply will also address a related Parliamentary Question filed by Ms Yeo Wan Ling for a previous Sitting1.

The Point-to-Point (P2P) Passenger Transport Industry Act sets out the regulatory framework for P2P operators. It aims to maintain an open and contestable P2P market. Under this regulatory framework, operators are prohibited from offering exclusive arrangements that, in effect, "lock in" drivers and prevent them from driving for other operators. This gives drivers more options and ensures that they are free to choose which operators to drive for. The proposed acquisition of Trans-Cab by Grab is being evaluated by the Competition and Consumer Commission Singapore (CCCS). Should the acquisition go through, Trans-Cab drivers will still be able to continue driving as they do today, taking street-hail jobs or ride-hail trips on Grab and any other platform.

With an open market, commuters are free to choose between different P2P services. These include street-hail services on metered fares and ride-hail services with flat fares. Just as drivers have the option of driving for multiple operators, commuters can compare prices and services offered by different ride-hail platforms and select the ride that best matches their needs and preferences.

Ride-hail operators are required to state fares upfront to ensure price transparency for commuters. Having an open market protects commuters, spurs platforms to innovate and improve their services, and allows smaller operators to compete with larger operators. It is also in the interest of platforms to ensure a fair allocation of jobs across drivers, so that they would continue to have a large base of drivers to serve commuters.

To ensure the safety of P2P passengers, all street-hail and ride-hail operators must also meet quality of service standards covering accident rates, offence rates and first inspection passing rates. These standards will continue to apply to Grab and Trans-Cab or any other entities granted approval to take over the licences.

Mr Yip Hon Weng asked about the growth in e-commerce, ride-hailing and car-sharing services and its effects on our vehicle numbers and road congestion. Private hire cars (PHCs), which include rental cars and cars used to provide ride-hail and car-sharing services, complement our public transport services and provide commuters with more options for direct journeys without having to own a car. Compared to private cars, PHCs generally serve more households and users over time.

While e-commerce, ride-hailing and car-sharing services have grown, the total number of vehicles on the road is governed by our Vehicle Growth Rate, which is currently at 0% for cars. We also deploy Electronic Road Pricing to ease congestion in a targeted manner and where necessary. This applies to all cars – be it PHCs or private cars.

Following a period of decline due to the COVID-19 pandemic, the overall PHC population has increased to almost the same level as before the pandemic. As a proportion of the total car population, the overall PHC population has remained stable at around 10% over the last four years. There are currently no plans to adjust the Certificate of Entitlement (COE) system in response to the growth in PHCs. We will continue to study the impact of PHCs on the COE market.

The P2P sector has evolved significantly since the implementation of the P2P regulatory framework in October 2020. We recognise the need to review our regulations to keep pace with changing commuter and driver needs, as well as structural changes in the industry. In consultation with the tripartite partners and other stakeholders, such as commuters, the Land Transport Authority is conducting a review of the P2P industry structure and regulatory framework over the next few months, to ensure the availability, resilience and inclusivity of P2P services.