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Gadgets & Home Improvement

Hail the new taxi apps

Bypassing taxi firms' booking systems, these apps help riders grab cabs and cabbies get more fares
The Straits Times - May 5, 2014
By: Kash Cheong & Colin Tan
| More
Hail the new taxi apps Cab drivers (from left) CB Lee, 42, Alvin Tan, 37, and Armstrong Ho, 46, use the Easy Taxi app to get more bookings. -- ST PHOTO: MUGILAN RAJASEGERAN

Taxi apps are giving cab companies a run for their money.

In just half a year since its launch here, GrabTaxi already claims that it has enough drivers using its service to be the "second largest cab fleet" here. Digital Life understands that Easy Taxi has amassed 7,000 cabbies under its wing and they have made more than 100,000 rides using the smartphone app since it started in December.

Yet, neither company owns a single taxi.

Fed up with long taxi queues and tired of long waits when calling to book a cab, commuters are turning to mobile transport booking apps that do away with many of the problems associated with conventional ways of booking a taxi.

GrabTaxi, Easy Taxi, MoobiTaxi and Uber apps offer real-time location tracking and link drivers with passengers directly. The companies behind these apps say their business is growing as they compete with established operators who have their own call centres.

Before GPS-enabled smartphones became so widely used, only cab companies, with their satellite systems, could easily track taxis and relay booking information.

Now, smartphones with GPS functions enable third parties to match drivers and passengers.

The apps are especially popular with cabbies from the smaller companies as their smaller fleet size means they get significantly less calls than market leader Comfort Delgro.

Mr Jonathan Pang, vice-president of products at MavenLabs, which launched MoobiTaxi last year, said: "The simple smartphone is levelling the playing field for everyone."

The potential of these apps has not gone unnoticed. Temasek-backed Vertex Venture Holdings just invested a new sum in GrabTaxi this month, bringing its total investment in the company to at least US$10 million (S$12.6 million). Some cab companies are concerned.

TransCab's general manager Jasmine Tan said: "We have invested in call centres. It seems unfair that these apps are using our cabs."

Popular with drivers now are GrabTaxi and Easy Taxi which offer cabbies plump incentives for taking assignments. Such variable payments top the $2 to $3 that cabbies earn for taking bookings by their own companies' reservation service. They even get compensated for no-shows.

This week, GrabTaxi is paying $58 to drivers who accept 20 jobs in a week, and $188 for 40 jobs. Drivers get $2 for a no-show if the company verifies with the passenger that this is the case.

Easy Taxi will pay $5 a job once drivers accept 12 jobs in a week, and $6 a job once they hit 24 jobs in the same period. Drivers get $100 more for taking 40 jobs in a week. They get $3 for each no-show. Such attractive payouts have allowed the app companies to grow their base quickly.

Bonus payouts

Mr Armstrong Ho, 46, who drives a Premier cab, started using Easy Taxi last December. He said: "I have earned about $2,000 in incentives this month with Easy Taxi."

This included a $1,000 payout for taking 100 jobs in a week. Mr Ho was one of eight drivers who received this "super bonus" last week.

These apps also benefit those from smaller cab companies. Said Mr Ho: "Most people tend to call Comfort at peak hour because it has more cabs."

But new apps level the playing field for smaller cab companies, which get fewer calls, he said.

They give passengers a way to reach a wider pool of drivers than by calling just one taxi company.

Ms Evon Tan, 32, who has been using GrabTaxi since January, said: "It's a win-win situation for drivers and passengers."

GrabTaxi and Easy Taxi require their passengers to key in their destinations. This allows drivers to plan their routes ahead of time.

Explained Mr James Low, 38, a Premier driver who uses GrabTaxi: "It's a very useful function. At least we know which passengers we can pick up when we are about to change shift."

Better chance of getting a cab

MoobiTaxi, a booking aggregator, works in a different way. Passengers can book rides via the app, which is also linked to Comfort and CityCab and SMRT Taxis' servers. Every ride request is also dispatched to Comfort and SMRT cabbies in the vicinity and appears on the screens in their cabs.

This increases a passenger's chances of getting a cab as drivers without smartphones can also respond.

MoobiTaxi said it wants to offer its app to all cab operators.

But MavenLabs' Mr Pang said operators with smaller and, therefore, more dispersed fleets are reluctant to get on board. They worry about coping with higher demand and meeting the service standards set by the Land Transport Authority (LTA), including a time limit for cabbies to arrive after accepting a booking, he added.

Such requirements do not apply to GrabTaxi and Easy Taxi as their bookings do not go through taxi companies' booking systems.

A fourth app, Uber, uses drivers and vehicles from limousine companies here. The app, which originated in the United States, offers high-end luxury cars on its Uber Black service, and regular sedans on its cheaper UberX service.

Uber's charges are simpler and are quite different from the complex combo of local flagdown fares and surcharges that the five taxi companies use. It also offers payment by credit card by default, with no additional fees.

Despite Singapore's relatively small population of 5.4 million, it has about 28,000 cabs on the road, which make it an attractive market for taxi app companies. In comparison, Hong Kong has about 18,000 cabs; and London, about 23,000.

Mr Gustavo Vaz, co-founder of Brazil-based Easy Taxi said: "Taxi rides are more affordable in Singapore when you compare them with Brazil and many European cities." Singapore's high smartphone penetration rate - at least 78 per cent - is an added draw for services looking for a quick roll-out and speedy adoption.

GrabTaxi general manager Lim Kell Jay said: "In the Philippines, many drivers didn't have experience with smartphones. We had to equip them with smartphones and teach them how to use these apps. Singapore's population is tech savvy, so that's a big plus."

Cab companies feel the heat

Several Comfort and CityCab drivers who use these apps told Digital Life that they have been questioned about accepting so many private bookings.

ComfortDelGro, the parent company of Comfort and CityCab, which got more than 32 million call bookings last year, said it does not ban its drivers from using such apps, but will "continue to invest and innovate so as to stay ahead of the competition".

The company, which owns more than half of Singapore's taxi fleet, added a field asking for a customers' destination in its own booking app a few weeks ago.

A CityCab driver, who only wanted to be known as Mr Lim, said: "We have been wanting this feature for such a long time."

He said that the new taxi apps are a wake-up call for the company.

At the beginning of this year, TransCab also sent out a message to its approximately 4,000 cabs to discourage drivers from using third-party apps.

Though the company does not ban its drivers from using the apps, its general manager,

Ms Jasmine Tan, feels that it is unfair for these apps to use the company's cabs as it has sunk money into a call centre.

Replying to queries from Digital Life, the LTA said it was "reviewing the impact of third-party applications on the taxi industry" and looking into "how it may benefit taxi drivers and commuters in matching demand with the supply of taxi services". For now, the companies behind the apps cannot charge an additional booking fee.

Last year, the LTA also told GrabTaxi to remove from its app a tipping feature that would let a passenger secure a cab more quickly.

"Taxi drivers are not allowed to overcharge passengers by collecting fares in excess of those set by their taxi companies," said an LTA spokesman.

MoobiTaxi's Mr Pang is sanguine. He said: "Technology is always disruptive. It is now disrupting the taxi market too."

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