How will new regulations for private hire car drivers help level the playing field?

Find out who is most affected.

Yesterday, LTA announced new regulations for private hire car drivers and vehicles with a focus on protecting commuter safety, and are expected to take effect by 1H17 .

One key aspect is the introduction of private hire car driver’s vocational license (PDVL), requiring all private hire car drivers to be registered with LTA, undergo relevant training (~10 hours), pass requisite tests, and attend refresher course every six years, among many other new requirements that draw similarities with the existing taxi regulations, albeit lessstringent. In addition, the existing taxi driver vocational license (TDVL) course is also revamped to close the gap with the new PDVL, with changes expected to take effect from May 16. Some changes include
reducing TDVL course from ~60 hours to ~25 hours and refresher course every six years from 6 or 9 hours to 3 or 5 hours, respectively.

Here's what experts had to say about the larger implications of the new regulations:

OCBC Investment Research:

In our view, these changes only help level the playing field in relation to requirements on drivers, but not helping in closing the gaps relating to requirements and standards imposed on the two different business models. In response, service providers of private hire car, Grab and Uber, expressed support for the new regulations. Rightfully so, especially since the introduction of new regulations is a signal that the government supports such business innovation that helps fill demand and supply gaps where traditional taxis are unable to during peak periods. Singapore’s National Taxi Association (NTA), however, thinks more changes are needed to level the playing field in areas of cost and pricing between taxi operators and private hire car service providers.

These areas include compliance requirements such as insurance coverage and emission standards imposed on taxi operators (but not on private hire car services), which costs are subsequently passed on to the taxi drivers and commuters. Pricing was also an untouched area, where private hire car services can adjust pricing according to market demand and supply but traditional taxi operators are not allowed to do so. Strict taxi availability standards such as the minimum daily mileage required of traditional taxi operators continue to be not applicable for
private hire car services. 

In all, while the new regulations and changes are good for the industry, they are not surprising to us, though we were expecting more steps taken by the government to level playing field in areas of competitiveness of business models, which ultimately affects profitability. Therefore, we do not rule out the possibility of further changes or introduction of new measures.

Shekhar Jaiswal, analyst, RHB

Earlier, only Singapore citizens and permanent residents could drive for Uber or GrabCar. While new regulations permit all residents of Singapore to work as private-hire car drivers,non-citizens can only work as drivers if they are employed by a limousine company. We think the Government may look to regulate the number of nonSingaporean private hire car drivers by limiting employment permits for them.

Some relaxation for taxi driver licences too. The Government has also tweaked the taxi driver’s vocational licensing (TDVL) system by cutting down the course time to 25 hours from 60 hours. Active taxi drivers with no demerit points will be exempted from refresher courses, while the rest will have to undertake only 3-hour and 5-hour refresher courses every six years vs 6-hour and 9-hour refresher courses earlier.

Easy conversion from taxi to private car. Taxi drivers who want to drive for private hire car companies would only need to undergo a 2-hour briefing on regulations for chauffeured services before being granted a PDVL. We believe the ease of conversion from taxi driver to private hire car driver will negatively impact the smaller taxi companies that are already struggling to retain drivers.