LIBERALISATION
In 2001, the Government liberalised the market. Barriers were lowered to allow new entrants. Trans-Cab, Premier and Prime entered the fray in the following years.
That created some competition for drivers, and Comfort started dishing out more incentive payments and welfare to its cabbies.
But nothing else changed. Cabby rental rates continued to be revised upwards, and commuters still complained about not being able to get a cab when they needed one (despite the overall fleet having grown by a third since liberalisation).
This was because even though there were newcomers, the dominant player continued to call the shots when it came to changes that mattered – such as rental rates and fares. Attempts by the smaller players to introduce differential pricing, or a variation of peak and off-peak fares, failed. Invariably, they would revert to Comfort’s model.
In time, there would be no change unless Comfort changed.
ENTER UBER, GRAB
Things took a dramatic turn when Uber and Grab entered the scene in 2013. For the first time, taxi drivers and commuters had a viable alternative. And ComfortDelGro started to face competition – for real.
When Grab partnered all the other smaller operators to offer commuters alternative ways to get a ride, creating a combined fleet size which almost equalled ComfortDelGro’s, the giant had met its equal for the first time.
So, what the 2001 liberalisation failed to do in more than 10 years, the disruptors did in under four. While Grab partnering the smaller cab firms had resized the market, it left Uber with a weakened position. The US company had no choice but to knock on Comfort’s doors.
Being equally weakened, ComfortDelGro had no choice but to sleep with the enemy.
DAVID AND GOLIATH
If the ComfortDelGro-Uber deal is allowed, the market will revert to its David-Goliath imbalance. But unlike the biblical outcome, Goliath almost always wins in any marketplace.
The current situation offers a level of competition never seen before in the rides market here. It should be preserved as it is, even if regulatory measures to enhance safety and policies to ensure fair tax treatment for all players can be improved.
Related story: ComfortDelGro will take 51 percent stake in Lion City Holdings
Related story: ComfortDelGro will launch dynamic pricing fare option on January 19
