New Regulatory Framework For The Point-To-Point (P2P) Transport Sector

     The Land Transport Authority (LTA) will introduce a new regulatory framework for the Point-to-Point (P2P) sector from June 2020 following the passing of the P2P Passenger Transport Industry Bill today.

Role of the P2P Sector in our Transport Landscape

2.   Taxis and private hire cars (PHC) are an important part of our vision for a well-connected land transport network, and complement our public bus and train network. Today, about 6% of all journeys are completed on taxis or PHCs.

3.   Since the entry of third-party taxi booking (TPB) service providers and PHC booking service operators, the P2P commuter experience has improved significantly. Commuters today have more P2P options and enjoy better service standards than before. With better matching of demand and supply enabled by technology and a flexible driver pool, commuters now enjoy shorter waiting times for both street-hail and ride-hail journeys. As operators find ways to innovate, commuters are also able to enjoy a wider range of services.

New P2P Regulatory Framework

4.   To ensure that commuters can continue to benefit from an evolving P2P sector, LTA will be introducing a new regulatory framework following the passing of the P2P Passenger Transport Industry Bill. The new regulatory framework will focus on the following areas:

a.   License bigger P2P service operators for greater regulatory oversight;
b.   Ensure commuter and driver safety; and
c.   Support the development of an open and innovative P2P industry.

Licensing of bigger P2P service operators

5.   The new P2P regulatory framework will allow LTA to regulate P2P service operators based on the type of services provided, i.e. street-hail or ride-hail. Street-hail is where commuters flag down an available taxi from the street; ride-hail is where commuters ‘book’ a taxi or PHC in advance through methods such as smartphone apps or call booking hotlines. As street-hail and ride-hail services are different in nature, operators will be required to hold separate licences for their street-hail and ride-hail services. Operators that offer both street-hail and ride-hail services will be required to hold two separate licences.

6.   The licensing regime will focus on larger P2P service operators, given the wider impact they have on commuters and drivers. Similar to taxi operators under today’s regulatory regime, street-hail service operators must be licensed and continue to have a minimum taxi fleet size of 800 vehicles. Ride-hail service operators with 800 or more vehicles on their platforms must also be licensed. To manage compliance costs and facilitate the growth of new and innovative services by smaller ride-hail service operators, LTA will exempt ride-hail service operators with fewer than 800 vehicles from the requirement to obtain a ride-hail service licence.

7.   It will be an offence for any person to provide street-hail or ride-hail services without a licence or an exemption. If convicted, these unlicensed operators may face a fine of up to $10,000 or imprisonment of up to 6 months, or both. A further fine of up to $500 may be imposed for each day that the offence continues after conviction. It will also be an offence to drive for these illegal operators.

Ensuring commuter and driver safety

8.   The new regulatory framework will focus on ensuring the safety of commuters and drivers, by giving LTA the powers to set safety requirements on licensed operators. For example, LTA will impose accident and offence standards on licensed operators (similar to what is being done for taxi operators today) to ensure that services provided are safe. Licensed operators must also ensure that the vehicles used to provide P2P services are able to pass the requisite vehicle inspections.

9.   LTA will continue to have the powers to issue a General Suspension Order (GSO) to prohibit drivers from driving for license-exempt ride-hail service operators who despatch drivers or vehicles without the necessary licences or insurance coverage. This is to ensure that all operators meet our basic safety regulations for vehicles and drivers used to provide P2P services.

10.  In emergency situations, LTA can issue emergency directives to all P2P service operators, including operators exempted from licensing, to minimise the risk of death or serious injury to individuals or damage to property.

Facilitating an open market that supports the development of innovative P2P services

11.  To ensure that commuters continue to benefit from an open P2P market, LTA will prohibit licensed operators from offering exclusive arrangements that prevent drivers from driving for other operators as such arrangements make it difficult for new operators to enter the market. LTA will, however, make an exception for drivers who are directly employed by operators, as full-time employment is inherently exclusive to the employer.

12.  LTA will also adopt a light touch regulatory approach towards service standards to allow market forces to drive service delivery and innovation. For example, in view of the higher availability of P2P vehicles, LTA has lowered Taxi Availability standards since July 2019, and will remove the standards completely under the new regulatory framework from June 2020.

Other licensing requirements

13.  In line with our vision of an inclusive transport sector, LTA will continue to require taxi operators to provide call booking services to facilitate bookings by those without access to a smartphone or booking apps. Licensed ride-hail service operators must also provide an option for commuters to indicate whether they require a vehicle that can fit a foldable wheelchair.

14.  Licensed operators will also be required to submit trip and driver-related data to LTA for regulatory and transport planning purposes.

15.  Licensed operators who fail to comply with LTA’s regulatory requirements under the licensing regime will be liable for financial penalties, suspension or even revocation of their licences.

Fare Regulations

16.  In line with the revised regulatory framework, the Public Transport Council (PTC) will be given the powers to ensure that PHC fares, like taxi fares, are clear and transparent.

a.   For street-hail trips, there will be no changes to existing fare regulations. Street-hail service operators will continue to be required to charge metered fares for street-hail taxi trips, in accordance with the fare structure stipulated by PTC.

b.   For ride-hail trips, the new regulations will ensure that licensed ride-hail service operators can continue to offer metered fare trips on taxis as per the regulations today. Licensed ride-hail service operators will also be able to independently set flat fares for ride-hail trips on taxis and PHCs. The flat fare to be charged for taxi and PHC bookings by licensed ride-hail service operators must be provided upfront to the commuter.

17.  In addition, the offences of fare evasion and overcharging will also be extended to PHC trips booked on licensed ride-hail service operators.

Other regulations

18.  Under the new regulatory framework, LTA will also license carpool operators with 800 or more vehicles on their platforms. They will be required to ensure that their drivers adhere to carpool regulations[1]. Separately, LTA has also reviewed other taxi and PHC regulations, and will be increasing the frequency of vehicle inspections for PHCs to once a year to ensure safety, and aligning the road tax payable for taxis to that for private cars and PHCs.

Conclusion

19.  LTA will carry out further consultations with the industry to further refine operating standards and licensing requirements. Licence applications for street-hail and ride-hail service operators, including carpool operators, will open in February 2020. The new regulatory framework will commence in June 2020.

20.  This P2P regulatory framework is the outcome of extensive consultations with drivers, the National Taxi Association, National Private Hire Vehicles Association, operators, and members of the public. LTA would like to thank all industry partners and members of the public for contributing to the review of the P2P regulatory framework, and will continue to work closely with our industry partners to safeguard commuters’ and drivers’ interests.

[1] Examples of carpool regulations include ensuring that fees are charged on a cost recovery basis and drivers do not conduct more than two carpool trips a day.