It was a Tuesday morning when I got into Mr Tan’s* cab. I had booked it on GrabTaxi, and I had come to know what to expect — grouchy taxi drivers who stayed silent through most of the ride, or particularly angry and ranty uncles who had probably been in bad traffic for too long and needed to vent their frustration. This cab driver was neither — well-spoken, courteous, and particularly chipper, we launched into a friendly conversation on my way to work.

It was then that I decided to try my luck, and asked about what he thought about the latest introduction of GrabCar, the new private car arm of the company he worked with to garner his business.

“Pardon me for saying this miss,” he said. “But I think they (GrabTaxi) have forgotten who got them to where they are today.”

The irony of this was that I had patronized his business thanks to the same technology that he now despised. It’s interesting to think that a mere 5 years ago, taxi booking was the hot new thing, with each taxi company running their own booking hotline. Businesses like GrabCar and Uber have brought this business onto our smartphones, and with them a whole lot of change. But is the change good?

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GrabCar Singapore

Problems in the Taxi Industry Before

In the startup scene, the word ‘disruption’ is used lightly — every other Silicon Valley startup claims to be disruptive, but more often than not, they hardly even make a dent in the stagnant market they enter. But look at the transport industry in Singapore, and the news it has made in the last two years, and you will see a stagnant industry that has truly been shaken.

Yes, stagnant. The taxi industry in Singapore has taken that top-tier in Singapore’s transport system, above the more affordable MRTs and buses, and thus, has faced the least change in the last few decades. Despite the highly-competitive scene between taxi companies, the lack of innovation in that scene meant that seasoned drivers learnt to play the system, picking and choosing customers as they wished, and preferring to frequent areas with higher success rates. According to GrabTaxi data, peak hour demand can increase up to three times the average, during which the taxi supply is hardly enough.

Booking hotlines quickly grew popular in 2010, but it soon came with its own issues — the hotline system still couldn’t accommodate high traffic (if you remember the Comfort and Citycab jingle, you know what I mean), and there was a high chance of no-shows for customers, leaving taxi drivers frustrated. In 2012, this led to the entrance of taxi-booking apps such as EasyTaxi and GrabTaxi, which empowered taxi drivers by putting the actual booking process into their own hands.

“Booking a taxi could be difficult as commuters only had access to a specific taxi network at a time. Many people would try calling the different numbers of multiple networks; if they could not book a taxi via one network, they would need to call another number and go through the process of calling and waiting for a response while holding on to the line again,” said Lim Kell Jay, General Manager, GrabTaxi Singapore to Vulcan Post.

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“Service standards were also found wanting, with some taxi drivers opting not to drive during certain hours even though demand outstripped supply. There was a need for alternative transport options to meet the high demand for taxis.”

The “Uber” phenomenon

Uber entered Singapore at the thick of its popularity, where markets across the world were being shaken up by this alternative to taxis. Private car hires opened the market to laymen to meet increased demand at peak hours, often earning them enough to make a living. While this met the three-fold demand for taxis at peak hours, it also appeared as fresh competition to taxi drivers, it came at the expense of taxi drivers, who hadn’t had any new competition in a while.

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