Photo of SMRT Taxi from Asiaone

After seeing record vacancy in its taxi vehicles, SMRT Taxi today (Jan 26) commenced a new scheme allowing taxi drivers to rent on an hourly-basis. The new move is the second latest profit-slashing idea by a Singapore taxi operator due to the competition from car-sharing applications like Uber and GrabTaxi.

In Dec 2016, taxi operator TranCab announced that it will cut rental by 34% in order to attract more drivers.

Read: Singapore taxi industry in crisis, TransCab cut rental by 34%

However, the SMRT Taxi scheme would require the driver to have a taxi vocational license and that the minimum rental rate is 3 hours. Speaking at its media announcement, SMRT Taxi said that they will pay for the maintenance cost of the taxi vehicle and the season parking charges. A website will be created to allow the drivers to register and log in to start using the taxis. The vehicles will have to be returned to the same location it started, with a hefty penalty rate of S$10 for every 15 minutes late. The penalty can however be avoided by adding another hour to the rental time.

According SMRT Taxis, if a driver rents a taxi on Sundays, between 10am and 4.59pm, he pays S$5.80 an hour. If it is rented during peak periods — Saturday, from midnight to 5.59am, for example — the rate is S$12.80 per hour. A promotion rate of S$2 per hour discount will be offered for a month for new drivers.

The Deputy General Manager of SMRT Taxi said that they are targeting inactive drivers, which is around 50,000 in Singapore. The managing director of SMRT Taxis said:

“This transformation of the business model will help the company increase capacity and competitiveness. We are making ourselves more competitive in the market by offering more flexibility, and taking on more responsibilities.”