ComfortDelGro was right to raise taxi fares today. The superlative rises in oil prices means many drivers have been out of pocket. Effective July 10, flagfall will be up 10 cents to S$2.50 (20 cents to S$2.80 if you ride in a Mercedes), the 10 cent increments are going to tick over faster, and the peak hour surcharge has been doubled to S$2. Saying this isn't going to make me popular, but ComfortDelGro was not only right to raise taxi fares today. Arguably it should have raised them even further.
First, ComfortDelGro hasn't raised prices in 12 years, they say. The price of oil has risen a lot in that time – even just the last three years.
Second, the extra money per fare goes into the pockets of the drivers – not the company. Comfort says taxi rental charges will remain the same, and it made no mention of any reduction in the subsidy Comfort currently pays on diesel fueled at its canopies.
Third, Singapore taxis are still among the best value-for-money, when you consider what you get for your buck in other cities in the region.
I accept that Comfort dominates the market because it controls a large majority of taxis in Singapore. Whatever breathing space this gives its competitors SMART Taxi and SMRT will likely be eroded by grumpy drivers, if those two companies don't also raise their fares.
The only disappointment in this issue is that the company said just last week, when the Straits Times ran a speculative story detailing some of the changes that were announced today, that it doesn’t comment on market speculation of such a sensitive issue. I fail to see how this issue is any less sensitive today than it was three days ago, unless there was a deliberate leak to test the waters before going ahead with the formal announcement today.