Taxi operators clinch new ally in war against Uber, GrabCar

Booking app Karhoo comes to the rescue.

Incumbent transport operators have secured a valuable new weapon in their fight against private car hire apps like Uber and GrabCar, according to a report by RHB Research.

Karhoo, a new taxi booking app that will be launching in the first quarter of 2016, is looking to work directly with registered taxi operators and private limousine companies such as ComfortDelGro.

The app has already teamed up with ComfortDelGro, and is looking to close deals with four other licensed operators.

“The key distinguishing point for Karhoo is that it only works with transport operators that are licensed and accredited by the regulators. This ensures commuters' safety and security, as well as the availability of professional drivers,” said RHB’s report.

Instead of replicating the current booking dispatch system operated by individual taxi companies, Karhoo relays its customers' booking requests to the taxi operators' existing dispatch systems. The app also plans to share its booking commissions with taxi companies.

Karhoo’s potential success hinges on three factors: its ability to become the default booking app for all operators, its capability to link itself with each operator’s existing bookings dispatch system, and the regulator’s decision to allow Karhoo to become the default taxi booking app in Singapore.

“We believe Karhoo’s ability to help existing taxi operators provide a formidable response to the rising business threat from private car hire services like Uber and GrabCar. If successful, we believe Karhoo could significantly enhance the utilisation of total taxi fleet in Singapore and, hence, increase the earnings for all taxi operators,” RHB said.

However, cost remains the biggest hurdle to Karhoo’s success, as booking a taxi is still relatively expensive as compared to booking a private car hire.
Each taxi booking costs a customer SGD2.30-4.50, while there are no charges for booking a private car on Uber or GrabCar.