Consultation Paper on Changes to Regulations for the P2P Transport Sector

Land Transport Authority - Point-to-point Transport Services & Vocational Licence, Public Transport Group

Consultation Period: 24 Jan 2019 - 21 Feb 2019

Status: Closed - Summary of Responses

Consultation Outcome

SUMMARY OF KEY FEEDBACK FROM PUBLIC CONSULTATION ON CHANGES TO REGULATIONS FOR THE POINT-TO-POINT TRANSPORT SECTOR

1 On 24 January 2019, the Land Transport Authority (LTA) published a public consultation document to seek the public’s feedback on the proposed changes to the regulations for the point-to-point (P2P) transport sector. The public consultation closed on 21 February 2019. In total, LTA received 86 pieces of feedback from the public. This paper summarises the public’s feedback and LTA’s responses.

Summary of feedback received on the P2P regulatory review

Ensuring an open P2P sector

2 LTA sought comments on the proposal to prohibit driver exclusivity arrangements. The majority of respondents supported this as it will prevent a single operator from dominating the market and ensure entry of new players and different business models. Many also agreed that it was important for drivers to have the flexibility to determine which operators to drive for.

3 Respondents also highlighted concerns that operators may make use of incentive schemes or impose conditions on drivers to circumvent this driver exclusivity prohibition. We received suggestions that operators should not be allowed to impose penalties or costs on drivers for switching platforms, such as by withholding fares and incentives. 

Licensing of all P2P Operators

4 LTA also sought comments on the proposed licensing of street-hail service operators and ride-hail service operators, with the latter tiered by size. The majority of respondents agreed that licensing all P2P operators would ensure greater regulatory oversight of the sector. They welcomed the fact that the licensing regime will strengthen safety standards in the P2P sector, and safeguard against fly-by-night operators. We also received feedback to licence carpooling operators to ensure that carpool drivers abide by the carpool trip and fare restrictions set by LTA. However, we also received feedback that traditional limousine services should not be licensed as this is largely a Business-to-Business (B2B) market that can self-regulate.

5 Notwithstanding the general support for the P2P licensing regime, there was a range of views regarding the licensing requirements that should be imposed on operators. We received suggestions that operators should be required to provide commuter-centric services such as lost and found services. We also received feedback that fares should be regulated to prevent operators from artificially lowering prices to gain market share as this hurts taxi operators. On the other end of the spectrum, there was feedback to regulate surge pricing as it makes fares more expensive for commuters. Some respondents also called for greater regulatory parity between taxis and PHCs, such as aligning the COE and road tax treatment between taxis and PHCs, and removing the 2% cap on taxi fleet growth cap that LTA currently imposes on taxi operators today.

Meeting diverse commuter needs

6 We sought comments on how the P2P sector can help meet the transport needs of different segments of the population. Most respondents agreed that call booking services are important, especially for the elderly, non-tech savvy individuals and tourists who may not have access to the Internet. Some respondents also shared that call bookings are an important fall-back option for commuters in the event of a telco data outage. However, others also observed that call booking services were less efficient forms of matching and called for them to be removed altogether. Some respondents raised concerns that this may impose additional business costs on taxi operators. One respondent questioned the commercial viability of call booking services in the long run.

7 We received a range of views regarding child seat requirements for taxis and PHCs. Slightly more than half the respondents supported requiring all children on taxis/PHCs to be properly secured in child seats as safety should not be compromised. However, we also received feedback that such a regulation should not be introduced and PHCs should be exempted from today’s child seat requirement as it could increase the cost of commuting for families with young children as operators may increase fares for trips with child seats. Large families may also have to split their families into multiple vehicles as there may not be sufficient child seats in a single vehicle. Some respondents were of the view that parents are fundamentally responsible for their child’s safety and should have the right to decide whether their child uses a child seat.

Ensuring commuter safety

8 The majority of respondents supported the proposal to impose safety-related regulations on operators to hold them accountable for ensuring commuter and driver safety. We also received feedback that LTA should impose a statutory lifespan on PHCs, similar to that of taxis.

LTA’s response

9 We are heartened to note that the majority of respondents are supportive of the main objectives and proposed policies of the P2P regulatory regime. Our vision is an open P2P sector that will allow new players and different business models to enter the market and provide different P2P solutions for our commuters. This will drive innovation, allowing commuter and drivers to benefit from better service delivery.

10 As respondents have highlighted, ride-hail operators vary in terms of size, market power and business models. While regulations will necessarily have an impact on business costs, respondents also identified the need for a P2P sector that caters to the diverse needs of different segments of the population. LTA will take into account these pieces of feedback as part of our regulatory review and seek to develop a regulatory framework which safeguards commuter and driver interests, while also managing the regulatory costs imposed on operators.

Other feedback

11 Through the public consultation exercise, LTA has also received other feedback not directly related to the P2P regulatory review. The table below lays out key pieces of feedback received and LTA’s responses.

Conclusion

12 LTA thanks all respondents for their valuable feedback. More details on the P2P regulatory review will be announced later this year.

Detailed Description

Aim

The Land Transport Authority (LTA) is seeking feedback from the public on the proposed regulatory framework for the point-to-point (P2P) sector.

Background

2. The Point-to-Point (P2P) transport sector in Singapore has evolved significantly in the last few years with the entry of Private Hire Car (PHC) booking service operators (BSOs) and Third-Party Taxi Booking (TPB) service operators. The P2P sector has two distinct types of services which are distinguished by the way drivers are matched to commuters. The first is street-hail, where commuters flag down an available taxi from the street. The second is ride-hail, where commuters can 'book' a taxi or PHC through smartphone apps, call booking hotlines, or even through online platforms. Today, commuters have more P2P transport options, while drivers also have more choices on the operators they can drive for.

3. Given the changes in the P2P transport sector, the Land Transport Authority (LTA) is reviewing the regulatory framework for the P2P transport sector to ensure that it continues to meet the needs of Singaporeans and our broader transport objectives, while taking into account industry developments.

Proposed Regulatory Changes for Consultation 

4. The proposed P2P regulatory framework has three objectives:

a. Maintain an open and contestable market by prohibiting driver exclusivity conditions;

b. Provide sufficient regulatory oversight to protect the safety and interests of commuters and drivers; and

c. Where appropriate, to streamline regulations to reduce business and regulatory costs.

Maintaining and open and contestable P2P sector

5. To maintain an open and contestable P2P sector, LTA intends to prohibit driver exclusivity arrangements for all parties in the market. Under the proposed regime, operators will no longer be allowed to prevent drivers from driving for other operators, and drivers are free to choose which operators they drive for. However, LTA will make an exception for drivers who are employed by operators as employees, as employment provides greater job protection for drivers. Prohibiting driver exclusivity arrangements will allow new operators to enter the market more easily and encourage greater competition to benefit commuters.

Ensuring sufficient regulatory oversight through a new P2P licensing framework

6. As street-hail and ride-hail operators provide the same fundamental service of transporting commuters from point to point, LTA proposes to licence all P2P operators to protect commuters and drivers. However, the licensing requirements for street-hail and ride-hail operators will be different, due to the different ways in which the service is provided. This is unlike today’s regulatory framework, where one set of regulations applies to taxi operators that provide both street-hail and ride-hail services, and there are no uniform regulations that apply to operators that purely provide ride-hail services.

A safe P2P sector for commuters with diverse needs

7. Under the new operator licensing framework, LTA intends to introduce requirements that ensure that operators play a part to keep commuters safe regardless of whether they provide street-hail or ride-hail services. For example, LTA is proposing that operators must ensure that drivers and vehicles are adequately licensed and insured, and drivers drive safely. LTA is also seeking feedback on how the P2P sector can provide safe and convenient transport options to cater to the transport needs of all Singaporeans.

Invitation to Provide Feedback

8. More details of the proposals are available in the Annex. We welcome your views and request that you respond to the specific questions listed in the paper. You may submit your feedback through the form below, electronically via p2p_consultation@lta.gov.sg, or mail hardcopy to the following address:

Point-to-point Transport Services & Vocational Licence Division
Land Transport Authority of Singapore
10 Sin Ming Drive
Singapore 575701

9. Your feedback is important to us. All views and comments received will be considered. We will consolidate and provide a summary of the key comments received at the close of the consultation exercise. The closing date for submissions is 21 Feb 2019.

Consultation Paper on changes to Regulations for the P2P Transport Sector [PDF, 433 KB]