Taxi firms to experience subdued fleet growth as car hire apps flourish outside regulation

Growth is projected at a muted 1.5%.

Taxi drivers and companies alike had been experiencing the ripples caused by the flashy new comers, also known as private car hire apps such as Uber and GrabCar.

These apps have also been enjoying the freedom they possess, as regulators take time to come up with regulations which would benefit both sides.

But in the meantime, taxi firms will be feeling the sting of the new competition, as established firms such as ComfortDelGro and SMRT are predicted to achieve a 1.5% growth in annual taxi fleet.

However, RHB Research says taxi operators should be able to maintain strong revenue growth.

“Replacement of older taxis with newer fleet under a rising Certificate of Entitlement (COE) environment, will push the asset cost and hence the rental rate for hired out taxis,” RHB Research said.

Meanwhile, RHB also expects the competition intensity from private car hire apps to gradually die down as the regulator takes constructive action to level the playing field.

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