Point-to-Point Passenger Transport Industry Bill to introduce new regulatory framework

29 August 2019

The Land Transport Authority (“LTA“) will introduce a new regulatory framework (“Framework“) for the Point-to-Point (“P2P“) sector, following the passing of the Point-to-Point Passenger Transport Industry Bill on 6 August 2019. It is expected that the framework will come into effect from June 2020.

Rationale

The Framework seeks to ensure that commuters can continue to benefit from an evolving P2P sector. The LTA notes that since the entry of third-party taxi booking service providers and private hire cars (“PHCs“) booking service operators, the P2P commuter experience has improved significantly. Commuters have more P2P options and better service options.

Key areas of the Framework are discussed here.

Licensing of bigger P2P service operators for greater regulatory oversight

Under the Framework, LTA will regulate P2P service operators based on the type of services provided (that is, street-hail or ride-hail). Broadly, “street-hail services” are intended to cover services where commuters flag down an available taxi from the street and “ride-hail services” are intended to cover services where commuters book a taxi or PHC in advance through smartphone apps or booking hotlines. Operators will be required to hold separate licences for their street-hail and ride-hail services, as these services are different in nature.

Similar to the current regulatory regime for taxi operators, street-hail service operators must be licensed and will need to have a minimum taxi fleet of 800 vehicles. It is expected that the Framework will focus on larger ride-hail service operators, given the wider impact that they have on commuters and drivers. The LTA stated in a press release issued on 6 August 2019 that ride-hail service operators with less than 800 vehicles will be exempt from the licensing requirement under the Framework. This will enable smaller ride-hail service operators to manage compliance costs and foster the growth of new and innovative services.

Provision of street-hail or ride-hail services without a licence or an exemption will be an offence and companies in breach will face a fine of up to S$10,000 or imprisonment of up to six months.

Ensuring commuter and driver safety

The LTA will have powers under the Framework to set safety requirements for licensed operators, such as accident and offence standards similar to those currently imposed on taxi operators. The LTA will also be able to issue a General Suspension Order to prohibit drivers from driving for license-exempt ride-hail service operators. In emergency situations, the 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

The LTA has also stated in their press release that it will prohibit licensed operators from offering exclusive arrangements that prevent drivers from driving for other operators. This is to ensure that commuters continue to benefit from an open P2P market, as such exclusive arrangements make it difficult for new operators to enter the market. An exception will be made for drivers who are directly employed by operators, as full-time employment is inherently exclusive
to the employer.

LTA will also adopt a light touch regulatory approach towards service standards to allow market forces to drive service delivery and innovation.

Fare regulations

The Public Transport Council will be given the powers to ensure that PHC fares, such as taxi fares, are clear and transparent. It is expected that there will be no changes to existing fare regulations for street-hail services, and that licensed ride-hail services will be able to offer metered fare trips and set flat fares for ride-hail trips on taxis and PHCs as long as the flat fare is communicated to the commuter upfront.

Reference materials

The following reference materials are available from the Parliament website www.parliament.gov.sg and the LTA website www.lta.gov.sg:

 

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