ComfortDelgro has announced revisions to its taxi fare structure, which is set to kick in on December 2012 and coincide with the festive shopping. A surge in taxi service demand and rising costs were cited as the key drivers for the revision. The previous fare adjustment was in Dec 2007.
Specifically, flag down, distance and waiting time fares will rise 4-10%, with the flag down fare for Limousine taxis expected to jump 20% (to S$3.90). The morning and evening peak hours will be lengthened - e.g. the weekday morning peak period will start at 6am (vs current 7am) while the evening peak period will stretch from 6pm to midnight (vs current 5-8pm). The evening peak period and city area surcharges will be extended to Sundays and public holidays. Finally, current call booking fees will be lowered by 6-8% but advance booking fee will rise 54% to S$8 (vs current S$5.20). Limousine taxi booking fees will increase 13-25%.
ComfortDelgro is the first taxi operator to announce fare adjustments and it is likely that other taxi companies will follow suit, given that they are faced with the rising cost pressure too. As the leading operator in the industry (with a taxi fleet of 15k), the drop in revenue, if any, would be momentarily and short-lived.
We think that the revised fare revision will have a positive impact on ComfortDelgro’s bottom-line whereas any impact on the commuters will be dependent on their specific travel pattern. Given that this is a deregulated sector, any intervention from CASE will only moderate the increment.
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