Keng Soon Auto Newsletter

Taxis Adopting Surge Pricing: What does it mean for us?

Singapore News /March 2017

Grab, Uber and other private-hire car have changed the way we travel in Singapore.

Subscribing to the idea of free market policy for their pricing model, the private-hire car has created much controversy surrounding the insanely high pricing during peak hour.

The surge pricing model has left a gashing scar on some of the users' bank account.

With the increasing occurrence of train breakdowns back in 2015, Uber surge pricing once reached 3.8x the normal fare.


Responding to this criticism regarding surge pricing model, Uber and Grab has implemented a more transparent pricing system by stating upfront how much the ride would cost. 

However, despite the effort to make pricing more transparent, these private-hire companies have not deviated much from the idea of surge pricing.

These companies feel surge pricing is essential to provide incentives for drivers to provide service during this period.


Seeing the potential, taxi companies are interested following the trend.

They are assured that adopting a surge pricing model would level the field given a number of regulations they receive from the government compared to these private-hire cars.

Trans-Cab, Premier and Prime taxi opened the conversation with the Public Transport Council (PTC) at the beginning of March 2017, expressing their desire to adopt the surge pricing model.


After talks on this topic, today, Grab announced that it would be launching JustGrab, that would provide a fix up front fare when booking a taxi.

The new system would take into account the distance, traffic, booking time and fee and others. 

The new pricing model would also acknowledge surge in demand, adjusting the price according to the ups and downs of the current demand. 

This pricing system is put in place as an addition to the basic metered fare.

Thus, allowing users to still be able to flag down a taxi on the road with the metered rate.


With the private-hire companies experiencing higher pressure from the government on purchasing COE, it is important for them to find ways to remain sustainable and push the surcharge lower with higher supply.

Thus, the interest of taxi drivers in honing the additional gains are matched with the interest these private-hire companies have to increase their fleet size. 

However, many who argued against the move towards surge pricing is concerned on the potential difficulty in getting a cab through traditional hailing method during these peak hours.


With the looming increase in the price of the taxi during peak hour and the unwavering COE price in Singapore, it is useful for commuters to consider an alternative mode of transport.



Source: StraitTimes, theVerge, StraitTimes