Dynamic Taxi Pricing

Taxi companies in Singapore are looking forward to restructure their fares by introducing dynamic surge pricing. Premier and Trans-Cab have recently announce that they will be opting for a dynamic pricing model. This means that they will apply it on their taxis on all trips book with them. These companies are following Uber and Grab’s model. It depends on surge pricing which helps in improving the taxi fares during peak demand periods. This helps in progressive demand and supply. Thus also ensuring that the drivers are paid for working during the busiest times.

Ng Chee Meng, Second Minister for Transport said that the companies must ensure that they are improving the demand of taxi services, not decreasing them by working on a dynamic pricing plan. However, Trans-Cab remains sure that the changeover to dynamic and surge pricing will help the drivers in earning more and creating a more level field for the taxi drivers to work in. Drivers for Trans and Premier have been complaining about private taxi drivers earning more because of flexible pricing, especially after the company slashed the prices earlier.

Meng and the Public Transport Council are yet to discuss the details of this proposal.

What changes?

When the commuter books a taxi through Grab and Uber, he gets to know about the dynamic surge in prices during peak times before his trip begins. Now, when the commuters will access the services of Trans and Premier through their mobile apps, they will get to choose from two options- whether to go with a standard metered fare or chose a surge pricing method. The commuter will choose his preferred method and an agreement will be set between the driver and commuter before the trip begins.

Surge time fares to be higher

Consequently, surge time fares are bound to be higher than the metered fares which may make many commuters uncomfortable. Some commuters may even get confuse between the double charging systems. Still, they will have the choice to book a regular metered method of payment. Remember, this new surge facility is not available for street-hail taxis as they will work on standard fares only. The commuters using mobile apps will be exposed to the new pricing system. This, according to Meng, will help in keeping the prices reasonable when compared with private taxi operators like Grab and Uber.

The issue is still open for discussion when the Ministry of Transport presents its budget. How exactly the move will play out in the future is yet to be seen. More details will only be reveal with the budget.

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