Comfort Delgro

[Ben]

I personally feel that this is a good move by CDG. Petrol is one of the biggest cost to drivers, other than rental. The saving is not insignicant to someone who drives a lot. So this is definitely a win-win for both CDG and its drivers. I am sure CDG will come out with some T&C to PHV drivers in order to enjoy the cheaper petrol, for example, prove that the driver has taken trips under Uber platform.

Seems like the tie up between CDG and Uber is becoming more interesting than thoughts.

[pianist]

how was the agm yesterday? Read the papers that three ex govt perm secretaries who are retirees got parachuted into the board ah?

[specuvestor]

^^ Actually I think Grab or Uber is only slightly cheaper than taxi on average, even excluding the surge pricing. The difference is the $4-6 discount. This is the cash burn from Uber / Grab

Capacity utilisation of PHV is very high because now customers get $0 cost short distance trips when they used to take bus. There's substitution effect. Question is what happens when this subsidy disappears which is actually what is hurting Comfort Delgro, and then utilisation of PHV drops. The equilibrium may not be so disruptive at all but I think this PHV certainly optimises our transportation system.

Zero profit strategy is sustainable over medium term. Loss is not. There is a big difference. If I am CD I will compete with pricing at zero profit for my taxi service to ride this short term aberration out. Uber / Grab has no loyalty to the drivers and vice versa which is evident what is happening to the Uber HQ now. If CD shows they are sharing the pain I think the drivers will stabilise.

As Grab and Uber provide private car rental service to driver, they are moving towards asset heavy model as well.

Personally, I choose Grab and Uber purely due to cheaper fare and I always find Taxi will always be a more comfortable journey.

Based on my personal experience, I don't find Grab/Uber cheaper especially with their surge pricing.  Unless we are including booking fee for taxi rides.  Uber Pool/Grab Hitch/Grab Share is cheaper because they are car pooling.

没有永远的朋友，也没有永远的敌人. Uber/Grab and all the conventional taxi operators were once business competitors, but now, they are becoming alliances. It is really interesting to see the development. Initially, it was the private hire cars (ie, Uber and Grab) vs the conventional taxi operators (CDG, SMRT, Trans etc). Now, with all taxi operators (except CDG) jumping into the camp of Grab, it seems the competition is between Uber VS Grab, with Grab on the winning side. So in order to fight the competition, CDG and Uber is now discussing a possible tie up. However, if indeed CDG and Uber joint forces, then the unhealthy competition will continues with each side trying to kill their opponent by continue to burn cash. No one will benefits except the customers.

IMHO, CDG should follow the footsteps of the other taxi operators and join Grab instead. In this way, Uber will have limited chance to survive and may exit the market, just like they did in China. When that happens, Grab, being the only private hire car operator, will probably stop or reduce their cash buring strategy. Then we will see a more healthy competition in the market. Fares will increase and the earning of drivers will improve.

Of course, if that happens, passengers will not enjoy the cheap rides they are getting so often now.

I heard that there has not been Grab subsidy since they took over Uber. The proof of the pudding had already come

[Bibi]

I heard that there has not been Grab subsidy since they took over Uber. The proof of the pudding had already come

I take private car hire almost everyday except on weekends. As of now, every morning 6.30am, grab is $11 - $13.  Taxis is $15 - $17.50.
Evening 6.15pm, grab is $11-$12, Taxi is $13-$15. Its still a no brainer to take private car.

When uber was around, its $9-$12 at those times.

The only time when its worth taking a taxi is when trains break down or heavy downpour. Private car pricing can be as crazy as $40+.

[CY09]

Another plus point of Grab is that if PHV come to your doorstep, it is still cheaper than a taxi which we call to our doorstep. The taxi fare structure has to be reviewed.

[specuvestor]

I heard that there has not been Grab subsidy since they took over Uber. The proof of the pudding had already come

I take private car hire almost everyday except on weekends. As of now, every morning 6.30am, grab is $11 - $13.  Taxis is $15 - $17.50.
Evening 6.15pm, grab is $11-$12, Taxi is $13-$15. Its still a no brainer to take private car.

When uber was around, its $9-$12 at those times.

The only time when its worth taking a taxi is when trains break down or heavy downpour. Private car pricing can be as crazy as $40+.

Interesting. The prices for 8-9 am rush hour probably would be similar to Raffles Place. Not sure why 6.15pm ride still favour PHV, which area do you work if can reveal?

But short distance PHV rides seems to be over based on observation

[Bibi]

I heard that there has not been Grab subsidy since they took over Uber. The proof of the pudding had already come

I take private car hire almost everyday except on weekends. As of now, every morning 6.30am, grab is $11 - $13.  Taxis is $15 - $17.50.
Evening 6.15pm, grab is $11-$12, Taxi is $13-$15. Its still a no brainer to take private car.

When uber was around, its $9-$12 at those times.

The only time when its worth taking a taxi is when trains break down or heavy downpour. Private car pricing can be as crazy as $40+.

Interesting. The prices for 8-9 am rush hour probably would be similar to Raffles Place. Not sure why 6.15pm ride still favour PHV, which area do you work if can reveal?

But short distance PHV rides seems to be over based on observation

Ok the reason I take phv everyday is because my son is still young and his school is far from my home. Morning is from Jurong West to Clementi area. Evening time, we had dinner at in-law house so its from Clementi back to Jurong West.

[Ben]

Things may get different after 30 June, because from 1st July onwards, those PHV drivers who did not get their PDVL by then are not allowed to drive anymore. As far as I know, they are still a huge % of drivers who didn't go for the course. It used to take a few weeks to complete the whole process, from signing up the course to sitting for the test. Now, one can sign up the course and take the test within a week. It means many are not keen to continue driving for Grab, or other operators, due to the unattractive incentives and low fares.

So if that happens, come 1st July, there will be fewer drivers, ie, lower supply, and therefore, prices might increase.

[Ben]

IRAS has made it very clear that ALL expenses related to the operating of PHV (petrol, rental, repairs and maintenances, parking, ERP etc) are not tax deductible. Basically, it means that the net fare=net profit, and is taxable. Operating costs easily adds up to 30% or more of total fares, so it is a huge disadvantage for PHV drivers. Because of this, and other reasons, many drivers are flocking back to drive taxi, as evident by CDG recently increases their fleet by a few hundreds new cars. I think this is quite a strong signal.

[CY09]

I agree with Ben analysis on this point. Phv drivers are shortchanged on the tax portion and it eats significantly into their income. To make it worse, phv fare structure means they get less revenue per trip than if they were taxis.

It's an interesting phenomenon