Teo Yin Yan, Author at Goody Feed

Taking effect from 1 May 2023, transport operator SMRT announced on 13 April 2023 that Strides Taxi and Premier Taxis would merge to create Singapore's second-largest taxi operator. A new joint venture company, Strides Premier, will be formed to hold the merged business. As of February 2023, it will have a fleet of about 2,500 taxis, overtaking the second-largest operator Trans-Cab, which has about 2,170 taxis. Aims to Driver Greater Efficiency for Ride-Hirers SMRT announced that demand for taxis and private hire cars had increased to pre-pandemic levels on 13 April 2023. This, along with the drive to safeguard the interests of drivers and passengers while enhancing efficiency, was the driving force behind their decision to merge and establish a new business. In the merger, Strides Holdings, a subsidiary of SMRT, will hold the majority stake in Strides Premier, with Premier Corporation and BS Investors jointly holding the remaining stake. The merger will also involve Strides Automotive Services and Premier Automotive Services. CEO of Strides Premier, Mr Ang Wei Neng, stated that the merger is a significant milestone for smaller players in the taxi industry. Founder of BS Capital Group, Mr Raymond Ng, emphasised that the merged business would be committed to serving existing customers better and hopefully attract more industry players back into the competitive point-to-point market. Merger Comes Amid Stiff Competition Within the Taxi Industry To transport analysts, the merger reflects an effort to overcome the challenges smaller taxi operators face in the wake of the declining traditional taxi industry and the increasing popularity of ride-hailing services. Associate Professor Walter Theseira from the Singapore University of Social Sciences (SUSS) explained that the taxi industry has been on a downward trend for the last decade due to the rise of ride-hailing platforms like Grab and the impact of the COVID-19 pandemic. In March 2022, Senior Minister of State for Transport Amy Khor revealed that while point-to-point transport trips had recovered to 80% of pre-pandemic levels, the supply of drivers still needed to catch up with the growing demand, mainly due to resignations during the pandemic. According to Associate Professor Theseira, many smaller players had already been looking to exit the taxi industry for some time because they could not survive in the declining industry. Associate Professor Raymond Ong from the National University of Singapore (NUS) agreed, noting that the competition has become fiercer for smaller companies as ride-hailing services have taken up a larger market share. He also highlighted the challenge for smaller companies to compete with bigger traditional taxi players like ComfortDelGro, which owns a fleet of 8,700 taxis, more than the combined size of its competitors. However, he stated that the merger between Strides and Premier would give them more bargaining power in the industry, even though their combined fleet of 2,500 taxis would still be significantly smaller than that of ComfortDelGro. Impact on Taxi Drivers & Passengers The merge between Strides and Premier would mean fewer rental operators available to taxi drivers. Associate Professor Theseira states this might cause some taxi drivers to feel concerned, as more rental operators would mean a broader range of options and potentially better deals for drivers. However, with fewer players in the market, drivers may have limited choices and may have to accept the rental rates offered by the merged company. On the other hand, the merger will probably have little to no effect on us passengers looking to get a ride. Associate Professor Ong predicts that the merger would not significantly change taxi availability or fares, and Associate Professor Theseira shares the same view. They stated that there shouldn't be any problems regarding taxi fares since the industry practice is for the leading taxi provider to make the first fare revision and others to follow suit. Additionally, ride-hailing fares and platforms are unlikely to be impacted as neither Strides nor Premier controls a private hire app. Aims to Make Merger as Smooth as Possible In light of any concerns, SMRT has stated that the merger will not affect any of the existing rental agreements with drivers. Former MP Ang Hin Kee, who is also an adviser to the National Taxi Association (NTA) and National Private Hire Vehicles Association, commented on the merger, stating that market competition only works when competitors are of similar sizes. He explained that having multiple operators does not always result in better outcomes for drivers or commuters due to the costs associated with each operator having its own management team and office space. SMRT and Strides Premier also work closely with existing drivers and staff, the NTA and the National Transport Workers' Union to ensure a smooth transition and fair terms for all parties involved in the merger. The NTA has expressed optimism about the potential synergies and economies of scale that the merger could bring. This includes potentially lower operating and rental costs for drivers. They have also emphasised the need to prioritise the taxi driver's needs and ensure fair treatment, enhanced work conditions, and stronger support for sustainable livelihoods.