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MOT Committee of Supply Debate 2016

Announcements, speeches, and infographics from MOT's
Committee of Supply Debate 2016.
ng chee meng
Second Minister Ng Chee Meng

Minister of Education (Schools)
Second Minister for Transport

Enhancing Point-to-Point Transport Services

Bringing people directly from point-to-point is also important in helping us develop a car-lite nation. Commuter interests are a key consideration as point-to-point transport options like taxis and chauffeured services take on an increasingly important role in helping us achieve this vision.

To help the taxi industry, changes will be made to the Taxi Driver Vocational Licence training curriculum. As part of the revised curriculum, taxi drivers will rely less on the street directory for route planning but pick up new skills like the use of navigational tools eg. GPS. This will help our taxi drivers benefit from technological changes and innovation.

For the first time, the Private Hire Car Driver Vocational Licensing (PDVL) Regime will be introduced in the spirit of taking care of commuter's interests, particularly their safety, as the chauffeured services industry grows. As more drivers enter the industry, we will ensure that they have the necessary training and experience to play a part in complementing Singapore's transport landscape.

1. Madam Chairperson, I thank Members for their questions on car ownership, and taxi and chauffeured services.

Appreciating and Supporting Our Taxi Drivers

2. As Minister Khaw noted, the emergence of new technology is transforming our transport system. Nowhere is this more evident than in the area of point-to-point transport services, especially in the area where taxis are providing this service today.

3. Since I joined the Ministry of Transport, I have had the pleasure of getting to know some of our 55,000 active taxi drivers. Our taxi drivers take great pride in their profession. Good taxi drivers know their roads, and where and when customers are likely to be waiting. They plan their routes well, try very hard to avoid traffic jams, and provide good customer service.

4. Singaporeans recognise that generally, our taxi industry has served their needs adequately. For the past three years, in our annual Taxi Customer Satisfaction Survey, more than 90% of respondents say that they are satisfied with taxi services. This of course is in large part, due to our taxi drivers.

5. Our taxi drivers are embracing new technologies. For example, more are taking bookings via apps. The number of pre-booked taxi trips has increased by 50% over the last three years, with the bulk of this increase coming from bookings via apps. This is partly because our taxi companies have improved their own booking apps, with smarter algorithms to match commuters' needs with the drivers. They have done this more efficiently and better. Third-party taxi apps, on the other hand, have helped to aggregate supply and demand at the industry level.

6. As a result, both taxi commuters and drivers have benefitted. Taxi drivers, especially those from the smaller taxi companies, tell me that they get more jobs from bookings, and earn more. Indeed, taxi driver incomes have increased continuously over the past three years.

7. However, not all the levers for responding to the new environment are in the taxi companies' and drivers' hands. The Government will play its part. One common feedback I receive from taxi drivers is that the training curriculum for the Taxi Driver Vocational Licence, or TDVL, should be updated to reflect technological developments. I agree. For example, we should no longer focus as much on memorising the street directory for route planning. We should instead also teach our drivers to use GPS and online navigational tools. In addition, we can deliver more training online, rather than in the classroom. I have therefore asked LTA to shorten the TDVL course with appropriate modifications.

8. I have also asked LTA to exempt good drivers who do not have any demerit points from having to attend mandated refresher courses. I hope this incentive can lead to better services which would ultimately benefit commuters. It will be a win-win situation.

Balanced Regulations to Protect Commuters' Interests While Not Inhibiting Growth of Chauffeured Services

9. Technology has also transformed chauffeured services to become an attractive alternative to taxi services. The entry of Uber and GrabCar has made chauffeured services more accessible to the general public. They have disrupted the industry. Mobile apps can now match individual passengers with a chauffeured car service quickly, and on a per trip basis, rather than on a per hour or per day basis as it was previously in the chauffeured industry.

10. Today, an estimated 8,000 to 10,000 drivers provide chauffeured services during peak hours. This has effectively increased the supply of point-to-point transport services by about a third during these hours. Many commuters I met, told me that they really appreciate how chauffeured services supplement taxi services, especially during periods when taxis are in short supply.

11. Most of the drivers providing chauffeured services are part-timers. One such driver, Mrs Rennu Mahajan, a mother to two sons and she's also a real estate agent, shared that she has been a part-time GrabCar driver since August 2015. She explained to me that she enjoys the flexible working hours where she can have her time with family while also earn extra income in a quiet real estate market.

12. The growth of chauffeured services has benefited commuters, but the new competition has understandably caused disquiet amongst some taxi drivers. Mr Ang Hin Kee did not quite raise the issues in parliament today, in the course of our discussion, he was representing NTA. We discussed many pertinent points about this disrupting effect on the taxi drivers, so I will take the time now to address some of these. Some of these cities like Paris, Brussels and Rio de Janeiro have taken what I think is the wrong approach, by creating protectionist regulations or banning chauffeured services entirely. Such an approach ultimately leads to a poorer outcome for commuters, and risks fossilizing the taxi industry.

13. Fortunately for us, we are in a much better position. Our taxi industry has generally been well run, based on sound market principles, and not excessively regulated. We do not rely on a medallion system or an expensive taxi permit or licencing system to limit the entry of new taxis or drivers. Therefore our taxi drivers are not in heavy debt, unlike some in Paris or Florence where a taxi driver must pay anywhere from 200,000 to 300,000 euros just for the privilege or right to provide taxi services. We have opened up our industry and deregulated fares for many years now, and so the industry in Singapore has remained competitive and market responsive. With our good foundation, we are better able to move with the times, and reap the benefits of technology improvements and innovation.

14. Nevertheless, with the growth of apps like Uber and GrabCar, some basic regulations are needed to ensure that the commuters' interests, particularly safety, are taken care of. Hence, LTA will introduce a new Private Hire Car Driver Vocational Licencing framework, PDVL. Like for the Taxi Driver Vocational Licence, this framework ensures that drivers providing chauffeured services undergo sufficient training on safety and the regulations for providing such services. Applicants will also undergo background screening, and be subjected to a demerit point system for errant conduct, like touting and soliciting street-hail jobs.

15. As the profile of private hire car drivers is quite different from taxi drivers, the eligibility criteria for their respective licences will not be exactly the same. As per current criteria, private hire car drivers must either be employed as a driver in a limousine company, or be registered as an owner of a chauffeured services company. For the safety of commuters, applicants for the licence must have a minimum driving experience of two years.

16. We recognise that the TDVL curriculum covers a substantial part of the PDVL curriculum. Hence, we will make it easy for taxi drivers to convert their TDVL to a dual TDVL-PDVL licence. They will only need to undergo a short briefing on the chauffeured services industry and regulations unique to the industry. This will allow them to easily switch between taxi driving and providing chauffeured services using private hire cars.

17. The Singapore Taxi Academy will continue to be the training provider for the TDVL. LTA will later decide on who would provide the PDVL.

18. In order to strengthen enforcement against errant drivers, private hire cars used to provide chauffeured services will have to be registered with LTA and they will display a distinctive, tamper-evident decal that would be visible from the car's exterior. This will also help to assure commuters that the vehicle is indeed registered with LTA.

19. LTA will make more detailed announcements later today.

20. We have taken a practical, balanced, and minimalist approach in these new regulations. They will ensure that we meet our key objectives of protecting commuters' interests and safety, allowing the point-to-point transport industry to continue to grow and innovate, and also at the same time helping our taxi industry adjust to new and disruptive “sharing” technologies.

COE and ERP Continue to be Necessary

21. Let me now turn to the questions on our Certificate of Entitlement (COE) and Electronic Road Pricing (ERP) policies raised by members.

22. Mr Leon Perera asked about the next-generation ERP system. As LTA had announced, the system is being developed and will be implemented from 2020. This new system will open up many opportunities to improve our transport system, beyond congestion management. There is of course potential to offer added value services to motorists, such as using it to replace paper coupons usage for roadside parking, getting more accurate and real-time traffic information and providing such real-time information to motorists, and also including enhancements to the Off Peak Cars scheme. Mr Perera also raised concerns about privacy under the next-generation ERP. LTA takes this issue very seriously. For the purpose of traffic management, only aggregated data will be used by LTA and we will also ensure that the appropriate data security technologies and controls are put in place for all data use. MHA has already addressed the ERP as a tool for security uses and I won't go further into that. Mr Perera has made some good suggestions that MOT will also take on-board to study as we look at the renewal of the ERP.

23. Mr Muhamad Faisal Abdul Manap shared his concern regarding COEs for motorcycles, and suggested different forms to make the Cat D motorcycle COE framework better. Mr Henry Kwek suggested riding on the introduction of the next-generation ERP system to consider increasing COE quotas for motorcycles, on the basis that being smaller in size, they contribute less to congestion.

24. First, I would like to point out that the lesser contribution of motorcycles to congestion is already accounted for in the lower ERP rates they pay, compared to other vehicle types. In addition, owners of motorcycles enjoy several concessions such as lower taxes compared to car owners. On the specific suggestion of allowing Cat D owners to have unlimited shorter term renewal, currently, COE tenures are all fixed at 10 years for all categories and as a concession, vehicle owners are allowed a 5-year renewal on the condition that they deregister thereafter. Allowing repeated shorter renewals for motorcycles, however attractive, favours the incumbent owners and delays timely deregistration and this reduces the quota for potential new buyers of motorcycles. It also can lead to older and potentially more pollutive motorcycles remaining on our roads.This is actually a phenomenon that we see today, where older motorcycles are kept on the roads for a long time polluting the air. So while these suggestions are on the table, we will continue to study this and see how we can make the Cat D framework better.

25. Ultimately, the COE system is designed to help control Singapore's vehicle population, given the land constraints. As Minister Khaw has explained, there is very limited room for us to grow the overall vehicle population, whether it is for cars or motorcycles. We should therefore be very cautious about increasing the COE supply in one form or another. Instead we should, be encouraging Singaporeans to move towards public transport. Having said that, I do know that COE is a hot topic and LTA does regularly review the COE framework to keep the system updated.

26. Dr Daniel Goh suggested levying COE surcharge on multiple COEs registered to a household. Indeed, he pointed out that this is not a new suggestion. MOT has consulted the public extensively in 2013 on this issue and the outcome of that discussion was that this form of surcharge or the form of proposal given by Dr Daniel Goh would be very easy to circumvent. It would also inadvertently penalize households that are larger. LTA had therefore decided not to implement such a measure back in 2013 after extensive consultation. All the considerations and findings had been shared and discussed with Singaporeans.

27. Mr Ang Wei Neng and Mr Yee Chia Hsing have offered suggestions to address the trend of Open Category COEs being used mainly to register Category B cars. The Open Cat provides flexibility in the COE system by allowing the vehicle mix to evolve in response to market demand. While most of the Open Category COEs in recent years have gone to Category B, this has not been the case always. For instance, Category E COEs were routinely used to register Category C vehicles between the years 2008 and 2010, when Category C COE prices exceeded that of Category A and B COE prices. We also saw this in recent COE bidding exercises just this year.

28. Nonetheless, to maintain a more stable supply of COEs in each category, we had lowered the Category E contribution rate from 25% previously to 20% back in 2012, and further to 15% in 2013, and to 10% in February last year. We are not keen on lowering the contribution rate to zero as it is still helpful to keep some fluidity within the system, so that COEs can still move across different categories to meet demand. Again, the COE system is one area that LTA monitors closely and will continue to study this area with all the suggestions that are given.

29. On the impact of the Early Turnover Scheme (ETS) on Category C quotas and premiums, while the ETS reduces the quota available for bidding, it also reduces the actual demand for new Category C COEs. This is because when an ETS-eligible vehicle is deregistered, that COE can be used to register a new vehicle within a one-month period. This means that the owner of the ETS-eligible vehicle would already have a COE obtained in this manner, and would not need to bid for a fresh COE for his or her new vehicle. In fact, what we have observed is that Category C COE prices have seen a slight downward trend generally since the introduction of the ETS in April 2013.

30. Mr Ang Wei Neng also asked if we should consider smoothening the supply of Category A and B COE quota in the coming year. We have studied this issue extensively. It is really difficult to determine the optimal amount of quota supply to hold back and determine the right time to release the withheld quota back into the system. The risks of inadvertently causing even more volatility in COE premiums are very real. In any case, even our projections were not quite on target. Recently, many more car owners have decided to renew their COEs, and this has tempered the previously expected increases in Category A and B COE supply by more than 10% in the last two quarters. Hence, we feel that it is better that we leave it to the market to determine the supply of quotas.


31. To conclude, a car-lite Singapore does not mean a car-less Singapore. Car-lite is about creating an eco-system of transport options in the form of good quality public transport, first-and-last-mile options, and point-to-point services like taxis and chauffeured services, so that Singaporeans can feel that their commuting needs can be met without owning a car. Importantly, it also requires a change in mindset, lifestyle and culture to one of sustainable, smart and green mobility. As Minister Khaw and SMS Josephine have stated, we have started the journey, and together we ask Singaporeans to come along this journey with all of us to make our transportation system better and greener for the future.

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