Dynamic pricing for cab fares and booked trips gets a go-ahead

Fares will now vary according to passenger demand.

The Land Transport Authority and Public Transport Council announced that taxi firms have been given the green light to implement a new dynamic pricing system where fares will vary according to passenger demand.

In a joint statement, LTA and PTC said, "We have no objections to the proposals."

To recall, several taxi companies sent out their proposals to consider implementing dynamic pricing for taxi fares and for booked trips.

"In general, commuters who book their taxis through mobile apps will have one more option. They can choose either the current booking method with metered fares, or a new option where fares are determined using dynamic pricing, and agreed between the taxi company and the commuter before the trip begins (much like Uber and Grab services). With this new option, the fares may sometimes be higher than metered fares, but they can also be lower. It will depend on supply and demand," read a Facebook post by Second Minister for Transport Ng Chee Meng.

The firms had proposed the plans for their drivers to better compete with private-hire cars, which have the flexibility to increase fares during peak periods to earn more.

With the competition from Grab and Uber, the official added that this will likely keep fares reasonable. However, he urged the firms to ensure that dynamic pricing improves and not worsens the matching of supply to demand of taxi services.