Extract of  Parliament report - 20th July, 2009 

Dr Lim Wee Kiak (MP Sembawang GRC) asked the Minister for Transport in view of the proposed $1 million drive to promote taxi ridership (a) why is the Ministry funding this project; (b) how is the cost shared among the various parties involved, from shopping centres to transport operators; (c) if a study was done to find out the reasons for the drop in taxi ridership; and (d) whether the taxi operators will consider reducing fares to improve ridership.

Minister for Transport, Mr Raymond Lim Siang Keat: Sir, the Land Transport Authority, in close consultation with the Taxi Operators Association and taxi companies, decided to set up a fund as a temporary measure, not only to help the taxi industry cope with the current economic downturn, but also with the view to gear the industry up for upcoming developments when the economy recovers, and when major projects like the Integrated Resorts open.

 The fund serves three objectives.  First, it aims to improve the service levels of taxi drivers, so as to enhance the overall delivery of service to commuters, by co-funding initiatives such as programmes on good service behaviours, proposed by the companies.  This is in line with the purpose of the Taxi Operator Licence framework, which seeks to ensure taxi companies deliver a high level of service by complying with Quality of Service standards. Second, it encourages the industry to do more to stimulate demand, by co-funding initiatives from the taxi companies for up to one-third of the cost of the promotional activities, but this will expressly exclude any direct subsidy of taxi fares.  Third, it serves to improve convenience and accessibility for taxi commuters during major events like the Singapore Formula 1 Grand Prix and the Singapore River Hongbao, by supporting additional infrastructure facilities such as temporary taxi stands.

 Such efforts will, on the whole, help the taxi industry better match the current taxi supply with demand, while continuing to improve service levels for the benefit of commuters. LTA’s objective is not just to help the industry cope with the downturn, but to also position the industry for the economic recovery and to better meet the additional demand expected when major projects like the Integrated Resorts open later this year.  Disbursements from the fund are by application only, and only proposals that meet the stipulated requirements will be approved.  While a $1 million budget has been set aside, actual utilization will depend on the merits of the proposals LTA receives.

As for Dr Lim’s question on fare adjustment, this is up to individual companies to decide, as the setting of taxi fares has been de-regulated.  It is ultimately a commercial decision that individual taxi companies have to make, taking into consideration various factors, including the impact on their taxi drivers amongst others.