Written Reply by Minister for Transport Khaw Boon Wan to Parliamentary Question on Fare Cap on Surge Pricing for Private Hire Car Operators

Mr Mohamed Irshad asked the Minister for Transport whether the Ministry will consider introducing a fare cap on surge pricing for private hire car operators.

Reply by Minister for Transport Khaw Boon Wan:

1.     Last year, when we reviewed the point-to-point (P2P) regulatory framework, the idea of setting a cap on surge pricing re-surfaced. There were mixed views on this and on balance, we decided that P2P fare regulations should focus on fare transparency. This will allow commuters to make informed decisions based on the fares set by operators. There are two safeguards to protect commuter interests. First, we only allow dynamic pricing for flat fare bookings, where fare levels must be displayed upfront, before the commuter books his ride. Second, commuters will continue to have the option to street-hail, or book taxis, according to the metered fare system, for which the fare structure, including the booking fee, requires PTC’s approval.

2.     Fare levels affect the supply and demand for P2P services. This is why dynamic fares are more effective in ensuring that commuters can find rides during peak hours. There are many forms of P2P services, each requiring different fare levels, e.g. larger or premium vehicles for higher fares. Given the range of service offerings and the dynamic nature of market conditions, it is best to leave fare levels to market forces. PTC does not intend to start regulating fare levels and setting caps.