From the comfort of her home or office, Ms Dawn Lim summons a chauffeured car to her doorstep within minutes with just a few taps on her smartphone.
For the past two years, the 39-year-old business development manager has done away with the “tedious process”, as she puts it, of hailing a taxi from the street or using a booking hotline.
With ride-hailing apps Uber and Grab – which use GPS to detect her location – Ms Lim can conveniently call a private-hire car in the vicinity, with a fixed fare that is quoted before she gets into her ride.
Taxis were once her main commuting mode, but no longer.
“I still take taxis, but the last time I took one was when my phone battery died,” she tells Insight.
Since they debuted here four years ago, ride-hailing apps have transformed the way Singaporeans commute, and their meteoric rise is giving the incumbent taxi industry a run for its money.
The apps have sent the number of chauffeur-driven private-hire cars soaring. There are more than 42,800 such vehicles, says the Land Transport Authority (LTA) – a figure which has overtaken the current taxi population of 26,000.
Through aggressive expansion, the San Francisco-based Uber and its rival, the Malaysia-founded Grab, have quickly gained a market foothold.
A Public Transport Council (PTC) survey conducted last August found that almost half of all point-to-point trips were served by private-hire cars, with the remainder by taxi.
Flush with funding in the billions and operating without strict regulations, the start-ups have aggressively undercut the market in price, bleeding losses to gain market share.
The taxi operators here have been reeling from the shake-up, with cabbies leaving the job.
For the first five months of this year, the average proportion of the taxi fleet which is sitting idle in yards – also called the unhired rate – hit 9.1 percent, nearly double the 5 per cent in the same period last year.
Incumbent and disruptor have been competing on an unequal footing. But starting last month, new regulations kicked in requiring the latter’s drivers to go for courses and to obtain a vocational licence. For-hire cars also have to be registered and identifiable with Government-issued decals.
Insight tracks the rise of the ride-hailing apps and examines the impact of the new regulations.
While both Uber and Grab employ a controversial dynamic pricing system in which fares can more than triple during periods of high demand – such as when train services are disrupted – their regular base and distance-calculated rates are at least 10 percent lower than those of taxis.
They also do not levy location and time-based surcharges, such as a 50 percent premium for a midnight ride.
But the main draw lies in the discounts on rides that are constantly on offer – a strategy to battle for market share.
Mr Christopher Parwani, 20, who uses Uber, says: “I don’t even open my app without checking online for promo codes first.”
These alphanumerical codes – which are either e-mailed to customers, or advertised in ads – have to be entered into the app to redeem the limited discounts.
Mr Parwani, an intern at a public relations firm, says he pays an average of between $8 and $12 for his Uber trips. He estimates that the same trips would cost him at least $15 in a taxi.
His cheapest ride? 90 cents. The trip from Serangoon to Bedok Reservoir should have cost him $8.90, but he had a promotional code that took $8 off.
THE NEW “CABBY”
Flexible working hours and the perks of having a car are what attracted many like Ms Thuruga Tangarasu to become private-hire car drivers.
The 35-year-old pre-school supervisor rents a Toyota Wish for $80 a day, from a car leasing company which is affiliated with Grab. She drives between five and seven hours a day on average, juggling her time between her full-time job, looking after her 10-year-old daughter, and up till June, night classes for a degree in early childhood management.
Ms Tangarasu estimates that in a good month, she can earn as much as $3000 in fares, but after deducting rental and petrol, and the 20 percent commission that Grab takes, she has about $1000 left. Uber also takes a similar cut.
Still, she points out: “I get to choose when I earn and when I work. This is also one of the most workable ways to own a car.”
In Singapore, the curbs on bank loans for cars and high car prices mean that buying a new $100,000 Japanese sedan would require a down payment of at least $30,000 – a hefty sum for many.
So to expand their supply of for-hire cars and recruit drivers, both Uber and Grab partnered with car rental firms, and set up their own operations, Lion City Rentals and GrabRentals respectively.
They dangle a common proposition: Own a car for as little as $60 a day, and pick up passengers to defray the costs. Besides making money from fares, the apps give cash incentives to drivers for doing more trips or for taking bookings during certain hours of the day.
The gambit has worked. There are at least 38,000 private-hire car drivers on the roads today, going by the number of applications for a private-hire driver vocational licence the LTA has approved.
For an industry just four years old, it is catching up fast with the estimated 50,000 active taxi drivers here.
The head of Grab Singapore, Mr Lim Kell Jay, says through GrabRentals, the firm wants to “empower and enable driver-partners who want to rent a car without buying their own”.
Uber Singapore’s general manager, Mr Warren Tseng, says Lion City Rentals helps to improve the utilisation of cars because they are both privately owned and used for ride-sharing – making them part of the transportation solution.