SINGAPORE (Feb 5): Melissa Lim uses a ride-hailing app on her smartphone to book a private-hire car as often as 10 times a week. And, she almost never takes a metered taxi. In fact, even when there is an empty taxi right in front of her, she does not climb in because of the sheer convenience offered by ride-hailing apps when it comes to making payments. “It is more convenient when my transactions are all done via a credit card linked to my [bank] account. I do not have to worry if I have sufficient cash for the ride or if the taxi accepts card payment,” says Lim.

It is no wonder that taxi drivers are abandoning their cabs in droves to rent private cars, hoping to pick up more passengers with ride-hailing platforms Uber and Grab. At least 3,000 cabbies have switched their taxis for a private car in the last six months of 2017. As at end-2017, there were 68,083 rental cars in Singapore, versus only 23,140 taxis, according to data from the Land Transport Authority.

With this shift, former cabbies are effectively giving up earning an income from metered fares and accepting the “dynamic pricing” model of the ride-hailing platforms. When passengers request a private-hire car via ride-hailing apps, they are quoted a fare by an algorithm that is based on the supply of cars and demand for rides at that point in time. While the fare for a particular ride is fixed before it begins, fares for the same ride can vary widely depending on a mind-boggling array of factors. For instance, fares from the CBD to Buona Vista could be as low as $8 during non-peak hours, but more than $26 during a downpour.

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