Singapore’s new ride-hailing apps are set to fail, but that’s a good thing

Photo credit: VasenkaPhotography

If you’d heard any rumors about the Singapore government potentially banning Uber and ride-hailing services, you can probably safely disregard them now.

As part of the Committee of Supply debate in the Singaporean Parliament last week, the Minister of Transport (MOT) Khaw Boon Wan stressed how important online ride-hailing services have proved in getting people around, and introduced a new framework that brings them under the jurisdiction of the Land Transport Authority (LTA).

Uber and Grab have already been sharing the Lion City’s streets with rival services. Now there will be more of those out there.

The government’s new regulations for ride-hailing services, to be brought into force in 2017, revolve around a new Private Hire Car Driver Vocational License that drivers of such services will have to get in order to be legal.

Like in other territories where these services have been regulated, like the Philippines and Australia’s New South Wales, the licensing process will involve background screening for drivers, a training course that is periodically repeated, and mandatory registration with the LTA.

This is good news for both Uber and its Singapore-headquartered competitor Grab. Both companies welcomed the government’s move.

And while traditional taxi companies in Singapore are still not too jazzed about the whole thing, the announcement that taxi drivers will be able to hold both a taxi driving license and a private car hire car license (effectively legitimizing the already widespread practice of drivers getting rides both from apps and street hails) is a welcome one.

New challengers to Uber and Grab

Uber and Grab have already been sharing the Lion City’s streets with rival services like ComfortDelGro’s taxi booking app. Now there will be more of those out there. Singapore’s SMRT Corporation, a public transport company that operates buses, trains, and taxis, and the second largest transportation company in the country after ComfortDelGro, just today announced its own private car hire service, Strides Transportation.

The SMRT Taxi subsidiary is expected to have 300 sedans on the road in the next six months, starting April 25th, 2016. According to SMRT Roads managing director Benny Lim, this will help satisfy the growing appetite for on-demand point-to-point transportation options.

An SMRT Chrysler taxi. Image credit: SMRT.

The big question is – is there enough of that appetite there in Singapore to sustain all these players? Maybe there is. God knows no Singaporean is happy with the average traditional taxi service. But will they make enough of an impact to Uber and Grab’s business? Probably not.

A head above the rest

Uber in particular has a lot of aces up its sleeve. It has a global network and tons of money in the bank. It has competitive tech that ensures a good user and driver experience. And despite its now immense size, it can move fast when it needs to adapt to individual markets – for example, launching a motorbike service in Bangkok and in India, or a cash payment option in several cities with low credit card usage (and also Singapore, but that’s another story).

Fast as a shark