Comfort Delgro

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Will additional rental be charged on the new gadget?

(not vested)

ComfortDelGro experiments with ‘third eye’ for taxi drivers

SINGAPORE — ComfortDelGro, Singapore’s largest taxi operator, announced today (Aug 18) that it is assessing a new in-vehicle smart camera that can alert cab drivers to potentially dangerous road situations.

The 38° wide-angle smart camera, known as Mobileye, will be trialled in 30 ComfortDelGro taxis for the next six months. It will be installed on the front windshield of the taxi, and will “read” different types of traffic signs while the vehicle is in motion. It then determines the risks associated with the surrounding traffic environment and provides real-time audio-visual warnings via a 49mm round-shaped display unit to drivers.

For example, if the unit detects that the taxi is travelling too close to another vehicle or a pedestrian, it will alert the cabby with a beep sound and flash an icon of a car or pedestrian.

Mr Yang Ban Seng, CEO of ComfortDelGro’s taxi business, said: “This device acts as another ‘eye’ for our cabbies, who spend a large part of their days and nights on the roads. Mobileye’s ability to alert our drivers of potentially risky road conditions will certainly help prevent accidents.”

Mr Pek Ban Choong, a ComfortDelGro veteran cabby of 21 years, agreed. “I believe this device will help me look out for dangers on the road. I will still need to be 100 per cent aware of my surroundings, but it is always good to have added help,” he said. CHANNEL NEWSASIA
http://www.todayonline.com/singapore/com...xi-drivers
“夏则资皮,冬则资纱,旱则资船,水则资车” - 范蠡
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(14-08-2014, 09:30 AM)theasiareport Wrote: I've read that Grab-Taxi is disrupting the industry in Singapore specifically. Does anyone have any experience with it?

I took a taxi last week when I returned from Bangkok. It was a Comfort taxi and I asked the driver if he uses apps like grab-taxi. He said there was no need for him to do so as Comfort has a large enough fleet and he gets sufficient business from bookings broadcasted in their radio.
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ComfortDelGro's Q3 profit rises 5.3%
By
Cai Haoxianghaoxiang@sph.com.sg@HaoxiangCaiBT
18814890898.jpg Boosted by a broad-based increase in revenue, land transport giant ComfortDelGro reported a net profit of S$80.8 million for the three months ended Sept 30, 2014, up 5.3 per cent from S$76.7 million a year ago. PHOTO: ST FILE
14 Nov5:50 AM
Singapore

BOOSTED by a broad-based increase in revenue, land transport giant ComfortDelGro reported a net profit of S$80.8 million for the three months ended Sept 30, 2014, up 5.3 per cent from S$76.7 million a year ago. Revenue grew 6 per cent to S$1.04 billion, from S$978.4 million a
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This article is extremely interesting on the disruption of 3P apps to the incumbents, esp with the guestimated numbers (number of subscribers, booking fee cuts etc) thrown in. Hopefully LTA's move to regulate does not mean strangulation of the creative destruction.

https://www.techinasia.com/grabtaxi-eat-comforts-lunch/

*************************


Friday was the first time I used the taxi booking app GrabTaxi to book a cab. I had a lunch appointment to go to and it had just started raining. None of the official apps from the taxi companies – Comfort, Trans-Cab, and SMRT – were successful in getting me a cab. The third try with GrabTaxi was successful. The cab arrived in a minute. On the way to lunch, I asked the driver about his experience with GrabTaxi and here’s what I found out.

Comfort, Singapore’s largest taxi company, has around 16,600 cabs plying the road. GrabTaxi has 10,000 registered drivers now in the country, making it the second largest ‘taxi operator’; and it’s rapidly signing up more drivers.

The way GrabTaxi broke into the Singapore market was by solving a demand and supply problem. When it launched, it absorbed the booking fee for commuters — the best it could do since it didn’t have a mechanism to pay commuters. On top of the normal booking charges, the company paid drivers a bonus of about $6 for each booking accepted. This in effect quadrupled the drivers’ cut from a normal booking. These two strategies allowed it to build up a large supply of both commuters and drivers from early on.

The driver I spoke to now takes more than 10 jobs a day from GrabTaxi, but only two from Comfort. The number of bookings now available through GrabTaxi is now so good that some taxi drivers are buying new phones just to be able to take GrabTaxi bookings (since the driver app is only available for Android phones currently).

GrabTaxi in Singapore easily completes more than 200,000 bookings a week now with its present fleet of drivers. It is arranging regular meetings with LTA to show the authorities that it has a higher rate of success in matching drivers to commuters than the current fleet operators.

GrabTaxi’s app is fast. Because it is constantly updated on the locations of its drivers, it knows exactly which drivers to tender a booking to. All drivers within a certain radius of a booking is given a chance to bid. A notification pops up on each driver’s phone, and if many drivers bid for a job, the conflict is immediately resolved by Grab Taxi’s servers and the successful driver is notified immediately, and so is the commuter.

When a booking is made by a commuter, the phone shows in real-time a list of cabs being offered the job. Once a match is made, the commuter’s and the driver’s phone numbers are immediately made available to each other so that they can communicate about any unexpected issues. Dialing can be done from within the app.

Because drivers and commuters are likely to be using 3G devices, the response times are much faster than those from the operator’s terminals, which are on the much slower GPRS. This eliminates annoyances such as many drivers turning up for the same job or commuters getting on another cab because they think their booking was not successful.

For the commuter, using GrabTaxi eliminates the hassle of trying to book cabs using three or four different apps when he’s in a hurry for a taxi. Moreover, the real time feedback that a booking is unsuccessful means that the commuter can immediately try the booking again. Unlike Comfort’s app, Grab Taxi does not ask the commuter to “try again in ten minutes” (probably because Comfort’s servers are overloaded, or they do not want unsuccessful bookings to mar a KPI which LTA monitors).

By forcing the commuter to key in his destination, GrabTaxi also allows drivers to take bookings that are along their way if they are headed for a shift change. This is one of the major reasons why it is usually difficult to book a cab from all fleet operators during the popular shift change times.

GrabTaxi has changed the power dynamics between drivers and the cab companies
Comfort has leveraged its size to consolidate its market position. Having the largest fleet of taxis in Singapore means that commuters are more likely to book its taxis, and having more bookings makes it more attractive to drivers, who are charged a higher monthly rental rate of about S$10 (US$8) more than smaller operators.


Apps like GrabTaxi and Easy Taxi are eroding this market power. According to my driver, the number of taxi drivers waiting to get a Comfort cab has dropped drastically, to the extent that Comfort is now offering its existing drivers a referral fee to introduce new drivers.

By monitoring the number of bookings a driver takes through the operator’s terminal, Comfort can identify but not prove which of its drivers are now relying on GrabTaxi for bookings. My driver was called up by Comfort, which wanted to know why he was taking GrabTaxi bookings. He replied that it was because GrabTaxi was where the customers were.

Some drivers have already switched from Comfort to the smaller operators in order to take advantage of lower rentals. My driver is attached to his cab, but he says that Comfort has started to nitpick with drivers who refuse to stop using GrabTaxi. However, now that these drivers don’t need to rely on Comfort’s market power, they are more than happy to switch to an operator with cheaper rentals, so it’s Comfort’s loss either way.

Only recently has Comfort started to listen to its drivers in improving its app by requiring the commuter to enter a destination. Previously, it had ignored calls by drivers to do so.

GrabTaxi’s monetization scheme works as follows: drivers have to pre-pay GrabTaxi to be part of its ‘fleet’. When a new driver signs up, he is given a $10 credit from which commissions are deducted. The driver has to top up his account when it’s exhausted in order to receive more bookings. Receiving pre-payments allows Grab Taxi to invest the funds before it is spent.

Compare GrabTaxi’s business model with Comfort’s. GrabTaxi has almost no fixed costs beyond a nominal office and some IT infrastructure, whereas Comfort has to buy, service, and support a huge fleet of taxis and cohort of drivers.

Let’s say GrabTaxi eventually levels off at 15,000 drivers taking five bookings a day, from which it takes a S$0.30 cut each. This works out to a revenue of S$8 million (US$6.4 million) a year, just for being a middleman (and not counting advanced bookings). Moreover, GrabTaxi’s IT operating costs will fall every year because of Moore’s Law.

Comfort has to compete or die
I think at this point, it is a foregone conclusion that taxi bookings will eventually be dominated by operator-independent services, whether it is GrabTaxi or another company.

For too long, Comfort has relied on its market dominance and has stagnated in improving its services. The usefulness of its electronic terminals (developed in the early 2000s by ST Electronics and running Windows CE) for bookings is probably at an end.

The arrival of GrabTaxi has quickly shown how outdated parts of Comfort’s business model are. Seldom have I seen a market so quickly disrupted. To survive and thrive, Comfort needs to refocus on its core business, that of leasing cabs to drivers.

It needs to compete on offering better rental rates to drivers, and on providing cabs that are more reliable than other operators’. This means, among other things, a reversal of its policy of hollowing out its maintenance crew, which has seen an inexorable replacement of experienced local mechanics with cheaper foreign labour, and which many drivers have complained about.

This will be fun.

Editor’s note:

GrabTaxi is unable to confirm whether they indeed have 10,000 registered drivers in Singapore completing 200,000 bookings a week. Nonetheless, a GrabTaxi spokesperson has said that they have the second largest network of taxi drivers in Singapore, and are receiving one booking every two seconds regionally. Extrapolated, that’s about 302,400 bookings a week, which could make the estimated figure a bit of an exaggeration since GrabTaxi operates in six cities.
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(24-11-2014, 07:06 PM)AlphaQuant Wrote: This article is extremely interesting on the disruption of 3P apps to the incumbents, esp with the guestimated numbers (number of subscribers, booking fee cuts etc) thrown in. Hopefully LTA's move to regulate does not mean strangulation of the creative destruction.

https://www.techinasia.com/grabtaxi-eat-comforts-lunch/

*************************


Friday was the first time I used the taxi booking app GrabTaxi to book a cab. I had a lunch appointment to go to and it had just started raining. None of the official apps from the taxi companies – Comfort, Trans-Cab, and SMRT – were successful in getting me a cab. The third try with GrabTaxi was successful. The cab arrived in a minute. On the way to lunch, I asked the driver about his experience with GrabTaxi and here’s what I found out.

Comfort, Singapore’s largest taxi company, has around 16,600 cabs plying the road. GrabTaxi has 10,000 registered drivers now in the country, making it the second largest ‘taxi operator’; and it’s rapidly signing up more drivers.

The way GrabTaxi broke into the Singapore market was by solving a demand and supply problem. When it launched, it absorbed the booking fee for commuters — the best it could do since it didn’t have a mechanism to pay commuters. On top of the normal booking charges, the company paid drivers a bonus of about $6 for each booking accepted. This in effect quadrupled the drivers’ cut from a normal booking. These two strategies allowed it to build up a large supply of both commuters and drivers from early on.

The driver I spoke to now takes more than 10 jobs a day from GrabTaxi, but only two from Comfort. The number of bookings now available through GrabTaxi is now so good that some taxi drivers are buying new phones just to be able to take GrabTaxi bookings (since the driver app is only available for Android phones currently).

GrabTaxi in Singapore easily completes more than 200,000 bookings a week now with its present fleet of drivers. It is arranging regular meetings with LTA to show the authorities that it has a higher rate of success in matching drivers to commuters than the current fleet operators.

GrabTaxi’s app is fast. Because it is constantly updated on the locations of its drivers, it knows exactly which drivers to tender a booking to. All drivers within a certain radius of a booking is given a chance to bid. A notification pops up on each driver’s phone, and if many drivers bid for a job, the conflict is immediately resolved by Grab Taxi’s servers and the successful driver is notified immediately, and so is the commuter.

When a booking is made by a commuter, the phone shows in real-time a list of cabs being offered the job. Once a match is made, the commuter’s and the driver’s phone numbers are immediately made available to each other so that they can communicate about any unexpected issues. Dialing can be done from within the app.

Because drivers and commuters are likely to be using 3G devices, the response times are much faster than those from the operator’s terminals, which are on the much slower GPRS. This eliminates annoyances such as many drivers turning up for the same job or commuters getting on another cab because they think their booking was not successful.

For the commuter, using GrabTaxi eliminates the hassle of trying to book cabs using three or four different apps when he’s in a hurry for a taxi. Moreover, the real time feedback that a booking is unsuccessful means that the commuter can immediately try the booking again. Unlike Comfort’s app, Grab Taxi does not ask the commuter to “try again in ten minutes” (probably because Comfort’s servers are overloaded, or they do not want unsuccessful bookings to mar a KPI which LTA monitors).

By forcing the commuter to key in his destination, GrabTaxi also allows drivers to take bookings that are along their way if they are headed for a shift change. This is one of the major reasons why it is usually difficult to book a cab from all fleet operators during the popular shift change times.

GrabTaxi has changed the power dynamics between drivers and the cab companies
Comfort has leveraged its size to consolidate its market position. Having the largest fleet of taxis in Singapore means that commuters are more likely to book its taxis, and having more bookings makes it more attractive to drivers, who are charged a higher monthly rental rate of about S$10 (US$8) more than smaller operators.


Apps like GrabTaxi and Easy Taxi are eroding this market power. According to my driver, the number of taxi drivers waiting to get a Comfort cab has dropped drastically, to the extent that Comfort is now offering its existing drivers a referral fee to introduce new drivers.

By monitoring the number of bookings a driver takes through the operator’s terminal, Comfort can identify but not prove which of its drivers are now relying on GrabTaxi for bookings. My driver was called up by Comfort, which wanted to know why he was taking GrabTaxi bookings. He replied that it was because GrabTaxi was where the customers were.

Some drivers have already switched from Comfort to the smaller operators in order to take advantage of lower rentals. My driver is attached to his cab, but he says that Comfort has started to nitpick with drivers who refuse to stop using GrabTaxi. However, now that these drivers don’t need to rely on Comfort’s market power, they are more than happy to switch to an operator with cheaper rentals, so it’s Comfort’s loss either way.

Only recently has Comfort started to listen to its drivers in improving its app by requiring the commuter to enter a destination. Previously, it had ignored calls by drivers to do so.

GrabTaxi’s monetization scheme works as follows: drivers have to pre-pay GrabTaxi to be part of its ‘fleet’. When a new driver signs up, he is given a $10 credit from which commissions are deducted. The driver has to top up his account when it’s exhausted in order to receive more bookings. Receiving pre-payments allows Grab Taxi to invest the funds before it is spent.

Compare GrabTaxi’s business model with Comfort’s. GrabTaxi has almost no fixed costs beyond a nominal office and some IT infrastructure, whereas Comfort has to buy, service, and support a huge fleet of taxis and cohort of drivers.

Let’s say GrabTaxi eventually levels off at 15,000 drivers taking five bookings a day, from which it takes a S$0.30 cut each. This works out to a revenue of S$8 million (US$6.4 million) a year, just for being a middleman (and not counting advanced bookings). Moreover, GrabTaxi’s IT operating costs will fall every year because of Moore’s Law.

Comfort has to compete or die
I think at this point, it is a foregone conclusion that taxi bookings will eventually be dominated by operator-independent services, whether it is GrabTaxi or another company.

For too long, Comfort has relied on its market dominance and has stagnated in improving its services. The usefulness of its electronic terminals (developed in the early 2000s by ST Electronics and running Windows CE) for bookings is probably at an end.

The arrival of GrabTaxi has quickly shown how outdated parts of Comfort’s business model are. Seldom have I seen a market so quickly disrupted. To survive and thrive, Comfort needs to refocus on its core business, that of leasing cabs to drivers.

It needs to compete on offering better rental rates to drivers, and on providing cabs that are more reliable than other operators’. This means, among other things, a reversal of its policy of hollowing out its maintenance crew, which has seen an inexorable replacement of experienced local mechanics with cheaper foreign labour, and which many drivers have complained about.

This will be fun.

Editor’s note:

GrabTaxi is unable to confirm whether they indeed have 10,000 registered drivers in Singapore completing 200,000 bookings a week. Nonetheless, a GrabTaxi spokesperson has said that they have the second largest network of taxi drivers in Singapore, and are receiving one booking every two seconds regionally. Extrapolated, that’s about 302,400 bookings a week, which could make the estimated figure a bit of an exaggeration since GrabTaxi operates in six cities.
It's about time. Singaporeans have been "taxi Suckers" for too long.
Globalisation of services has indeed reach Singapore. Wonder what LTA going to do?
WB:-

1) Rule # 1, do not lose money.
2) Rule # 2, refer to # 1.
3) Not until you can manage your emotions, you can manage your money.

Truism of Investments.
A) Buying a security is buying RISK not Return
B) You can control RISK (to a certain level, hopefully only.) But definitely not the outcome of the Return.

NB:-
My signature is meant for psychoing myself. No offence to anyone. i am trying not to lose money unnecessary anymore.
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Two cents for discussion.

GrabTaxi is interesting because it raises the potential to change the pricing structure and competition dynamics in the taxi industry. In the past, when Comfort raises passenger prices, other taxi companies will follow. But now with GrabTaxi, this might change. To understand this game, consider the cost benefit analysis of passengers, drivers, Comfort and smaller taxi companies before and after GrabTaxi below.

Before GrabTaxi

The taxi market can be separated into the flag down and call booking segment. In the flag down segment, taxi companies with more taxis have a higher chance of getting customers assuming each taxi has an equal chance of being flagged down regardless of the company it belongs too. In the call booking segment, the more market share a company have, the better the chances company can match passengers to drivers and the faster the taxis can reach the passenger because there is higher chance the taxi is nearby. This results in passengers mainly calling the company with the most taxis only.

LTA's call booking number that matches passengers with taxis from any taxi company would supposedly change this if LTA's service can match passengers faster than Comfort's call booking system. Unfortunately the system is designed to route passenger calls to the respective taxi companies' call centres. As noted from LTA's website: http://www.lta.gov.sg/content/ltaweb/en/...-taxi.html
"The call will first be routed to one selected taxi company's call centre. If the call centre's lines are busy, the call will automatically be re-routed to another taxi company's call centre. The call will be terminated only after three unsuccessful attempts to route the call."

This means passengers do not get significantly faster or better matching because it is just like calling the other companies and still finding out that in the end Comfort has highest chance because of a larger fleet to match. So passengers still call Comfort first and call other lines later.

For drivers, the number of flag down passengers is the same regardless of the company they rent their taxis but they get more call booking passengers if they rent from Comfort because of passenger's preference to use Comfort first for call booking. So more taxi drivers rent from Comfort. This gives Comfort significant market power to raise taxi car rentals and passenger prices.

When Comfort raise prices, other taxi companies have three choices:
1) Raise prices and lose some customers;
2) Maintain prices and increase taxi utilisation rate; or
3) Maintain prices and expand fleet if taxi utilisation rate is full.

Assuming no cartel/collusion activity, other taxi companies responded by raising prices because they probably expect not much improvement in taxi utilisation rate in flag down and call booking because of their smaller size. Passengers rarely choose cheaper taxis to flag down because their chances of encountering a cheaper taxi is lower since Comfort has a huge fleet. Passengers can choose cheaper taxis to call but the the chances of getting a match from a smaller company is again low or slow. Thus, unless other taxi companies increase their fleet size, it would not significantly increase these companies' taxi utilisation rate.

To model expansion, assume probability of flag down is based on the proportion = Company's number of taxis divided by Total number of taxis in the market. It becomes harder to improve the probability of flag down as the total number of taxis increases. This also suggests that taxi companies who expand earlier, say by buying 1000 extra taxis, when the total number of taxis is smaller gains the most incremental improvement in probability, but it becomes harder to expand later as the second mover gains less by buying again the same number of 1000 taxis. Eventually, the gains of 1000 extra taxis is outweigh by the costs of buying the 1000 taxis and nobody expands anymore. Further, for the company that has the call booking segment, the utilisation rate of its taxis is higher and thus that company has the incentive to expand more than smaller companies.

Alternatively, taxi companies may buy out other competitors and thus improve the probability significantly because the total number of taxis is constant in a buyout but the company's own number of taxis increases. For the seller, it knows that the buyer's next best alternative is to buy more taxis and thus would not be willing to sell cheaper than the buyer's next best alternative which is to expand. If seller does not sell, it can raise prices as biggest player raise prices and still be profitable while buyers cannot expand since its too expensive. So sellers have less to lose. But for the biggest player, buyouts also benefit its' call booking business which is a synergy smaller companies do not enjoy. So the biggest player would buy out smaller players until its call booking business is solidified.

This predicts that the game is played this way:
1) Expand as early as possible when it is cheap, don't do buyouts because expanding can reduce the second mover's gains of expanding;
2) After that, do buyouts if it is cheaper than expanding or if it is faster than expanding organically to strengthen call booking until it is too expensive; and
3) Finally, once pricing power is secured, raise prices for taxi rentals and passengers.

Thus, we are left with the sad reality that other taxi companies would follow Comfort's lead. Curiously, other taxi companies cannot raise prices first because it is easy for passengers to just avoid that taxi company and get a Comfort taxi given the higher chances of getting Comfort via flag down and call booking. It is easier to switch away from smaller taxi companies to bigger taxi companies.

After GrabTaxi
GrabTaxi changes the game by changing the chances of getting a taxi. Unlike LTA's call routing, GrabTaxi actually match customers to taxis better and faster than Comfort's system. Now, customers don't call Comfort and instead use GrabTaxi. With GrabTaxi, drivers have same flag down and call booking business regardless of taxi company and would be willing to switch to the cheaper company. Previously, the lack of call booking business prevented drivers from switching companies. This suggests Comfort would experience lower rental revenue and other taxi companies would be able to raise rentals higher.

If GrabTaxi gives every taxi equal chances, Comfort would get most of the business from GrabTaxi because the chances of getting a Comfort taxi is just higher due to more taxis belonging to Comfort. However this volume would be lower than the current business it enjoys being the first number passenger calls. Thus this means, lower passenger revenue.

But the most interesting potential impact is in passenger pricing. Let's say Comfort raise prices again, GrabTaxi can make Comfort drivers pay GrabTaxi to take a customer and GrabTaxi pay customers, effectively lowering prices for passengers. GrabTaxi would do this to increase volume and thus profit. Drivers may subsidise customers if they get more business and increase profits. Further GrabTaxi can employ dynamic pricing by setting different surcharges base on local demand supply which would clear the taxi market better.

Smaller companies might find it profitable to expand slightly because drivers demand more rentals after drivers gain more business from GrabTaxi.

From a cost standpoint, running a call center is more costly than an app. Further, taxi drivers are spending to buy mobile phones to use GrabTaxi while Comfort has to maintain the in taxi booking system for the driver. Given the lack of calls, Comfort might want to shut down its call booking center but LTA would not allow it at the moment. So this cost item is to remain.

Conclusion
Given that GrabTaxi increases the chances of matching and thus taxi utilisation, it should also grow the taxi market as it is easier for passengers to get taxis and drivers to get business. As such, Comfort would experience demand growth which is offset by reduction in taxi utilisation and thus pricing power. If growth outweighs losing pricing power, Comfort will still benefit with increasing profits. For smaller taxi companies, growth, better utilisation and increasing pricing power would benefit them. Thus, in the short run, GrabTaxi seems like a win for smaller taxis and passengers while its effect on Comfort is unclear.

In the long run, there is a possibility that GrabTaxi becomes the only app that people use to call for taxis because call centers become unprofitable and LTA might just allow taxi companies to close down call centers. This gives GrabTaxi significant pricing power and might be a cause for concern. A case in point is SISTIC, raising prices for tickets. So eventually, passengers and drivers might still pay higher prices for better matching to GrabTaxi, not Comfort.
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(25-11-2014, 11:20 AM)HyperionTree Wrote: Two cents for discussion.

GrabTaxi is interesting because it raises the potential to change the pricing structure and competition dynamics in the taxi industry. In the past, when Comfort raises passenger prices, other taxi companies will follow. But now with GrabTaxi, this might change. To understand this game, consider the cost benefit analysis of passengers, drivers, Comfort and smaller taxi companies before and after GrabTaxi below.

Before GrabTaxi

The taxi market can be separated into the flag down and call booking segment. In the flag down segment, taxi companies with more taxis have a higher chance of getting customers assuming each taxi has an equal chance of being flagged down regardless of the company it belongs too. In the call booking segment, the more market share a company have, the better the chances company can match passengers to drivers and the faster the taxis can reach the passenger because there is higher chance the taxi is nearby. This results in passengers mainly calling the company with the most taxis only.

LTA's call booking number that matches passengers with taxis from any taxi company would supposedly change this if LTA's service can match passengers faster than Comfort's call booking system. Unfortunately the system is designed to route passenger calls to the respective taxi companies' call centres. As noted from LTA's website: http://www.lta.gov.sg/content/ltaweb/en/...-taxi.html
"The call will first be routed to one selected taxi company's call centre. If the call centre's lines are busy, the call will automatically be re-routed to another taxi company's call centre. The call will be terminated only after three unsuccessful attempts to route the call."

This means passengers do not get significantly faster or better matching because it is just like calling the other companies and still finding out that in the end Comfort has highest chance because of a larger fleet to match. So passengers still call Comfort first and call other lines later.

For drivers, the number of flag down passengers is the same regardless of the company they rent their taxis but they get more call booking passengers if they rent from Comfort because of passenger's preference to use Comfort first for call booking. So more taxi drivers rent from Comfort. This gives Comfort significant market power to raise taxi car rentals and passenger prices.

When Comfort raise prices, other taxi companies have three choices:
1) Raise prices and lose some customers;
2) Maintain prices and increase taxi utilisation rate; or
3) Maintain prices and expand fleet if taxi utilisation rate is full.

Assuming no cartel/collusion activity, other taxi companies responded by raising prices because they probably expect not much improvement in taxi utilisation rate in flag down and call booking because of their smaller size. Passengers rarely choose cheaper taxis to flag down because their chances of encountering a cheaper taxi is lower since Comfort has a huge fleet. Passengers can choose cheaper taxis to call but the the chances of getting a match from a smaller company is again low or slow. Thus, unless other taxi companies increase their fleet size, it would not significantly increase these companies' taxi utilisation rate.

To model expansion, assume probability of flag down is based on the proportion = Company's number of taxis divided by Total number of taxis in the market. It becomes harder to improve the probability of flag down as the total number of taxis increases. This also suggests that taxi companies who expand earlier, say by buying 1000 extra taxis, when the total number of taxis is smaller gains the most incremental improvement in probability, but it becomes harder to expand later as the second mover gains less by buying again the same number of 1000 taxis. Eventually, the gains of 1000 extra taxis is outweigh by the costs of buying the 1000 taxis and nobody expands anymore. Further, for the company that has the call booking segment, the utilisation rate of its taxis is higher and thus that company has the incentive to expand more than smaller companies.

Alternatively, taxi companies may buy out other competitors and thus improve the probability significantly because the total number of taxis is constant in a buyout but the company's own number of taxis increases. For the seller, it knows that the buyer's next best alternative is to buy more taxis and thus would not be willing to sell cheaper than the buyer's next best alternative which is to expand. If seller does not sell, it can raise prices as biggest player raise prices and still be profitable while buyers cannot expand since its too expensive. So sellers have less to lose. But for the biggest player, buyouts also benefit its' call booking business which is a synergy smaller companies do not enjoy. So the biggest player would buy out smaller players until its call booking business is solidified.

This predicts that the game is played this way:
1) Expand as early as possible when it is cheap, don't do buyouts because expanding can reduce the second mover's gains of expanding;
2) After that, do buyouts if it is cheaper than expanding or if it is faster than expanding organically to strengthen call booking until it is too expensive; and
3) Finally, once pricing power is secured, raise prices for taxi rentals and passengers.

Thus, we are left with the sad reality that other taxi companies would follow Comfort's lead. Curiously, other taxi companies cannot raise prices first because it is easy for passengers to just avoid that taxi company and get a Comfort taxi given the higher chances of getting Comfort via flag down and call booking. It is easier to switch away from smaller taxi companies to bigger taxi companies.

After GrabTaxi
GrabTaxi changes the game by changing the chances of getting a taxi. Unlike LTA's call routing, GrabTaxi actually match customers to taxis better and faster than Comfort's system. Now, customers don't call Comfort and instead use GrabTaxi. With GrabTaxi, drivers have same flag down and call booking business regardless of taxi company and would be willing to switch to the cheaper company. Previously, the lack of call booking business prevented drivers from switching companies. This suggests Comfort would experience lower rental revenue and other taxi companies would be able to raise rentals higher.

If GrabTaxi gives every taxi equal chances, Comfort would get most of the business from GrabTaxi because the chances of getting a Comfort taxi is just higher due to more taxis belonging to Comfort. However this volume would be lower than the current business it enjoys being the first number passenger calls. Thus this means, lower passenger revenue.

But the most interesting potential impact is in passenger pricing. Let's say Comfort raise prices again, GrabTaxi can make Comfort drivers pay GrabTaxi to take a customer and GrabTaxi pay customers, effectively lowering prices for passengers. GrabTaxi would do this to increase volume and thus profit. Drivers may subsidise customers if they get more business and increase profits. Further GrabTaxi can employ dynamic pricing by setting different surcharges base on local demand supply which would clear the taxi market better.

Smaller companies might find it profitable to expand slightly because drivers demand more rentals after drivers gain more business from GrabTaxi.

From a cost standpoint, running a call center is more costly than an app. Further, taxi drivers are spending to buy mobile phones to use GrabTaxi while Comfort has to maintain the in taxi booking system for the driver. Given the lack of calls, Comfort might want to shut down its call booking center but LTA would not allow it at the moment. So this cost item is to remain.

Conclusion
Given that GrabTaxi increases the chances of matching and thus taxi utilisation, it should also grow the taxi market as it is easier for passengers to get taxis and drivers to get business. As such, Comfort would experience demand growth which is offset by reduction in taxi utilisation and thus pricing power. If growth outweighs losing pricing power, Comfort will still benefit with increasing profits. For smaller taxi companies, growth, better utilisation and increasing pricing power would benefit them. Thus, in the short run, GrabTaxi seems like a win for smaller taxis and passengers while its effect on Comfort is unclear.

In the long run, there is a possibility that GrabTaxi becomes the only app that people use to call for taxis because call centers become unprofitable and LTA might just allow taxi companies to close down call centers. This gives GrabTaxi significant pricing power and might be a cause for concern. A case in point is SISTIC, raising prices for tickets. So eventually, passengers and drivers might still pay higher prices for better matching to GrabTaxi, not Comfort.
Yes! Consumers will just "LL" have to pay eventually who ever corner the market?
i just remember not too long ago i just pay $1 using ATM to apply for IPO. Now i have to pay $2. That's 100% increases. And none make any noises. $1 more only we all can afford ma. So the next increment will be $4 or more i suppose. Nobody makes noises leh!
WB:-

1) Rule # 1, do not lose money.
2) Rule # 2, refer to # 1.
3) Not until you can manage your emotions, you can manage your money.

Truism of Investments.
A) Buying a security is buying RISK not Return
B) You can control RISK (to a certain level, hopefully only.) But definitely not the outcome of the Return.

NB:-
My signature is meant for psychoing myself. No offence to anyone. i am trying not to lose money unnecessary anymore.
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Cabcharge lashes ‘illegal’ Uber
THE AUSTRALIAN NOVEMBER 27, 2014 12:00AM

Andrew Main

Wealth Editor
Sydney
FORMER ABC and Sydney Airports chief executive Russell Balding revealed the extent of taxi group Cabcharge’s concerns about upstart Uber by devoting almost half his address as Cabcharge chairman yesterday to why the new global ride-sharing service should not be allowed to flourish in Australia.

“What they don’t tell you about Uber and what you won’t read in those glowing media reports is that the company is an offshore entity that does not appear to pay any taxes here,’’ he said.

“UberX ride-share operates illegally and encourages its drivers and others to also break the law.

“UberX ride-sharing is dangerous, unsupervised and as the NSW government has said, illegal,’’ he said.

“Governments need to do something about this.’’

His big audience of older investors, many of them former taxi drivers and owners, was firmly in favour but he didn’t get things all his own way.

His favoured nominee as a new director, former NSW Department of Transport and Sydney Airport executive Rodney Gilmour, resigned for what Mr Balding called “personal reasons’’ on Tuesday night after only six months in the job.

Mr Balding declined to comment on how the proxy votes had gone in relation to Mr Gilmour’s formal approbation but shareholder activist Stephen Mayne, having one of his many unsupported tilts at a board seat, told shareholders he understood that “clearly Mr Gilmour was comfortably defeated’’.

There was no criticism made of Mr Gilmour, but as deputy Cabcharge chairman Neill Ford conceded, Mr Gilmour was not an independent.

There has been consistent criticism of Cabcharge’s corporate governance over the years, not least the late Reg Kermode’s occupation of the dual roles of executive chairman since he founded the group in 1976, but also the lack of independent directors on the board.

The remuneration report set a record of its own by being rejected by more than 25 per cent of shareholder votes for the fourth year running since the “three strikes” rule was brought in — in yesterday’s case by a whopping 57 per cent “against”.

But shareholders showed their mixed feelings by once again voting not to use their power to force a compulsory spill of the board, as the rule provides, by an overwhelming 94 to 2.1 per cent.

Mr Mayne said after the meeting that he understood major shareholders Lazard and Aberdeen Asset Management had voted against the remuneration report but had “gone to water’’ in the matter of spilling the board, which he said was “still entirely stacked with Kermodists’’, as he tagged the late founder’s supporters.

“The onus is on those major shareholders to call an EGM and remove the Kermodists and put up three or four genuinely independent directors,’’ he said.
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ComfortDelGro kept at ‘buy’ by OCBC with $3.03 fair value

SINGAPORE (Nov 27): OCBC Investment Research is maintaining its “buy” call for ComfortDelGro ( Financial Dashboard) with a fair value price of $3.03.

In a Nov 27 report, analysts Eugene Chua and Wong Teck Ching said they expect the transport operator to deliver steady growth into 2015.

“Stability is ComfortDelGro’s key strength thus far for FY14 and we think its ability to remain so is attractive,” say the analysts.
...
http://www.theedgemarkets.com/sg/article...fair-value
“夏则资皮,冬则资纱,旱则资船,水则资车” - 范蠡
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http://www.straitstimes.com/news/singapo...-yong-chua

special report: in their shoes
Tales of a taxi 'Uncle': ST manpower correspondent Toh Yong Chuan steps into the shoes of a Singapore taxi driver

From the surly to the genial, it is passengers who make or break your day. But the pressure sure piles up
Published on Dec 1, 2014 9:00 PM
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The most I earned in a single day - after driving 12 hours and deducting for rental and fuel - was $141. It would mean a monthly income of more than $4,000 if every day was like that and I worked a full month. -- ST PHOTO: JAMIE KOH

The most I earned in a single day - after driving 12 hours and deducting for rental and fuel - was $141. It would mean a monthly income of more than $4,000 if every day was like that and I worked a full month. -- ST PHOTO: JAMIE KOH

The most I earned in a single day - after driving 12 hours and deducting for rental and fuel - was $141. It would mean a monthly income of more than $4,000 if every day was like that and I worked a full month. -- ST PHOTO: JAMIE KOH
A taxi driver cannot but help overhearing conversations, and these range from rants about bosses to quarrels between lovers. -- ST PHOTO: JAMIE KOH


By Toh Yong Chuan Manpower Correspondent

On my fourth day as a taxi driver, I drove for six hours at night with just one five-minute toilet break.

It was past midnight when I headed home and absent-mindedly got into the wrong lane at the junction of Bishan Road and Ang Mo Kio Avenue 1. The traffic lights turned green and I took off, almost hitting another taxi.

When I got home, my wife greeted me with a hug and said: "You have the taxi driver smell."

"It is the smell of hard work," I said. It was the odour of being cooped up for hours in stale air. I didn't mention my near accident.

I have always been fascinated by cabbies. As a manpower reporter, I have interviewed numerous drivers, yet there remained so much I did not know about them. Topmost on my mind as I embarked on a two-week stint as a cabby were these questions: How hard is it to be a cabby? And how much can a cabby earn?

So my SMRT cab, a Toyota Prius with the registration number SHC4123S, became my second home for 10 to 12 hours a day. I split a typical day into two, plying the roads from 6.30am to 11am, and from 5pm until I was too tired to go on.

Every morning I would head first to Serangoon North or Ang Mo Kio housing estate, near my home. There are always passengers going to work from Housing Board estates.

After that, there was no telling where I would end up.

I thought I knew Singapore well, but my stint as a cabby took me to places I never knew existed. I picked up passengers from obscure spots like a sprawling offshore marine base in Loyang, and Punggol Seventeenth Avenue in an area that somehow doesn't have Avenues One to Sixteen.

I discovered that Tampines housing estate is so huge it is sandwiched between Tampines Expressway and the Pan Island Expressway, and is accessible via no fewer than seven expressway entrances and exits. I found myself in Tampines almost every other day during my cab driving stint.

Lessons from passengers

On Day 1, my first passenger was a man in his 30s, dressed in a blue long-sleeved shirt and black trousers.

He got into my cab at 6.50am along Ang Mo Kio Avenue 9 and said: "Pandan Crescent, go by Upper Thomson, Lornie, Farrer, AYE."

Those were the only words he uttered and he kept his eyes locked on his smartphone for the rest of the journey. He did not notice that in my excitement at picking up my first fare, I had forgotten to start the meter until about seven minutes into the trip. His fare was $23.73 and I must have saved him about $2.

He gave me a hint of what was to come - that most passengers prefer to be left alone.

The rest of that day took me to Changi Airport, Bedok, Pickering Street, Alexandra Road, Amoy Street and Upper Bukit Timah Road in the morning. That evening, I went to Serangoon Road, Mount Vernon Road, Yishun, Woodlands, Sembawang Road, Tampines, Bedok, Bishan and Paya Lebar.

All my passengers were people who flagged me on the street. I was not confident enough to respond to radio bookings, which would have needed me to reach the pick-up point within five, seven or nine minutes of a call. So I ended up cruising empty most of that day, with the longest stretch of over an hour in Woodlands.

My best passenger was a woman in her early 40s who got into my cab along Alexandra Road. I chatted with her and eventually revealed that I was driving the cab for charity. She handed me $12 for her fare of $11.18 when she reached her Amoy Street office and said: "Keep the change."

The worst experience was after I picked up a woman at Khoo Teck Puat Hospital in the evening. She wanted to go to a condominium in Jalan Mata Ayer, off Sembawang Road, which I was unfamiliar with. She was from Myanmar, and I misunderstood her directions, given in halting English. When I took a wrong turn, she let fly with a rebuke in Myanmarese. The taxi meter showed $9.44 but I said she could pay just $8. That pacified her a little.

My first day ended at midnight when I pulled into my regular Caltex petrol station in Lorong Chuan to refuel and wash the cab. My usual car washer Zainal did not recognise me until I waved at him - twice. "Times are bad huh? You started driving taxi part-time?" he asked.

I was too tired to explain. I had driven 246km and taken 14 people on 13 trips. My takings, after deducting petrol cost, taxi rental and $4 for washing the cab, came to just $29.66 for 12 hours' work.

Thankfully, things got better over the following days. I kept to the same work routine except on weekends, when I drove from noon to midnight.

By the end of Day 2, I had fine-tuned my greetings to these:

"Good morning, Sir!"

"Good evening, Madam!"

"Heading to work, Sir?"

"Going shopping, Madam?"

"You're going to work early, Sir!"

"Long day at work, Madam?"

If the passenger did not reply or uttered only a monosyllabic answer, I took it as my cue to be quiet and to just drive.

Passengers travelling in groups tend to ignore the cabby, talking among themselves as if you are not there. So I couldn't help overhearing people complaining about the Government, and workers complaining about their bosses. A young couple having a tiff complained about each other all the way from Sembawang Shopping Centre to Toa Payoh Lorong 1. "I am breaking off with you," yelled the woman as she stormed off.

There were some passengers who, literally, made me feel sick.

Like the young woman I picked up in Jurong East who coughed and sneezed all the way to Choa Chu Kang. When it came time for her to pay, I hesitated when she handed me the money. After she left, I sprayed the cab generously with the Lysol disinfectant I kept in the cab's glove compartment.

Then there was the man who sounded like he was from China. Getting into my cab near Bugis Junction, he burped. And burped. And burped. It was obvious that he had just eaten "ma la huo guo", or spicy steamboat, for dinner.

An elderly man who got into my cab in Coleman Lane, at the Grand Park City Hall hotel, wanted me to reverse about two car lengths back into Coleman Street to avoid going round the block so he would save 30 cents.

In Chinatown, a man heading for South Bridge Road told me to take a "short cut" through Temple Street from New Bridge Road. I did, only to find traffic at a standstill along Temple Street - and that was when he paid up and jumped out, leaving me stuck for 15 minutes.

I have to say something about people who eat in taxis. While drivers cannot stop people from eating in their cabs, most dislike it because of the smell and the mess left behind. Thankfully I met only one passenger who ate on the go. The young mother insisted on feeding her toddler biscuits despite my asking her not to eat in the cab.

"The boy is hungry," she insisted.

They left such a mess that I had to spend 30 minutes and more than half their $8.30 fare to have the cab cleaned at a petrol station.

My most unpleasant ride of all was with a woman in her 50s who complained non-stop about my driving from Tagore Industrial Park to Yishun Avenue 3. Her beef was that I drove too slowly and braked too hard.

"You are a new driver and it is my bad luck getting into your cab," she ranted. "I was planning to buy 4D but I will not, because it is bad luck meeting you."

I just bit my tongue.

But my worst passengers were the ones I never met. They were the people who made taxi bookings, then failed to show up.

On a rainy Wednesday morning I was in Telok Blangah Way when I accepted a call booking for Delta Avenue, and headed there rightaway. It took five minutes and I passed more than five passengers trying to hail cabs in the rain. When I got to the pick-up point, the passenger was nowhere to be found.

It was one of three "no shows" I encountered during my stint. Taxi drivers are helpless when this happens.

Each day, however, I would meet at least one or two passengers who stood out by being pleasant, saying "please" or "thank you", or making conversation that helped to make a lonely job less monotonous.

I took three British Airways pilots from Mandarin Hotel in Orchard Road to the Esplanade, where they were going to have supper at Makansutra Gluttons Bay. When we got there, they invited me to join them. "C'mon, take a break," one of them said, and he meant it. I declined because I was just too tired.

A teacher and an architect who spoke with me long enough to learn I was a reporter on assignment and that all my earnings would go to charity paid me in $50 notes and told me to keep the change - which added up to $43.

A passenger I took from the Botanic Gardens to Battery Road sent SMRT an e-mail complimenting me, saying: "I feel that he really went the extra mile to provide a comfortable journey for all his customers and I am really impressed. Thank you, Uncle!"

It made my day.

As my days of being a cabby progressed, I found that my earnings were decent, if not very high.

The most I earned in a single day - after driving 12 hours and deducting what a cabby usually pays for taxi rental and fuel - was $141. It would mean a monthly income of more than $4,000 if every day was like that and I worked a full month. My typical daily takings were between $90 and $100, or about $3,000 a month, and even that would call for driving 10 to 12 hours a day, with no day off.

The median gross monthly income of Singaporeans and permanent residents in June this year, excluding employers' CPF contributions, was $3,276.

My stint was too short for me to befriend other cabbies at coffeeshops, but I managed to pick up some secrets of the trade.

It's easy to get passengers in the morning when people are heading to work from HDB estates.
To earn $3 more in the evening, go into the CBD and pick up passengers while the CBD surcharge applies from 5pm to midnight. Sorry, but people waiting just outside the CBD will have to just keep waiting. Even inside the CBD, cabs will be scarce just before the surcharge hours begin.
Heartland towns like Woodlands and Sembawang offer slim pickings in the evenings, because residents hardly go out then. But hospitals everywhere are good places to find passengers, especially after evening visiting hours.
Overall, demand for taxis far exceeds supply during the morning and evening peak hours, so a cabby who is disciplined about driving during these periods can earn a decent living.

There are downsides as well.

The long hours on the road affected my sleep, and most nights I slept barely six hours. By Day 3, I was resorting to taking two Panadols before hitting the road.

Backaches were a frequent bother, from sitting so long.

Cabbies need toilet breaks, and the most convenient stops are at petrol stations. I found that many do not have soap, and at a Geylang petrol station, the toilet has no door.

There are simply no convenient public toilets in the Orchard Road area for taxi drivers, but I discovered that the Ba'alwie Mosque off Dunearn Road lets cabbies use its toilet. I blessed the good people of the mosque when I needed to go desperately one night.

My cab-driving days ended on Day 11 of my stint. It wasn't a good day for me.

Early that morning the 16-year-old schoolboy in my cab was late for school and begged me to drive faster. I relented, stepped on the gas and ran a red light at 6.47am. Instantly, there were two camera flashes and I knew I had been caught by the traffic light camera. That meant $200 gone in less than a second - my earnings from about 18 hours of work!

But that wasn't why I stopped driving. The trouble had begun two days earlier, when I discovered I'd developed a haemorrhoid from nine days of sitting for hours. I learnt that haemorrhoids are a common ailment among cabbies, along with backaches and high blood pressure.

The pain had become unbearable, so I decided to end my cab-driving experiment three days earlier than planned.

A month later, the traffic summons arrived. I hoped the Traffic Police would be sympathetic, but my appeal drew a swift rejection and a chiding: "Make a conscious effort to comply with traffic rules and regulations which are made for your own safety and that of other road users."

Looking back, I still wonder why even passengers much older than me called me "Uncle". It seems that if you drive a taxi in Singapore, you're everyone's Uncle or Auntie.

I returned the cab to SMRT after clocking 2,739km, having earned $2,294.60 for charity and gaining a newfound respect for taxi drivers.

tohyc@sph.com.sg

Related Links
application/pdf iCONTales of a taxi ‘Uncle’

Background story

Leave me alone

He got into my cab and said: "Pandan Crescent, go by Upper Thomson, Lornie, Farrer, AYE." Those were the only words he uttered... He gave me a hint of what was to come - that most passengers prefer to be left alone.

ON THE ROAD WITH ST REPORTER

In Part Two of a three-part series, Toh Yong Chuan steps into the shoes of a Singapore taxi driver.

Last week, he reported on his stint as a security guard.

To prepare to be a cabby, he signed up for a two-week taxi driving course conducted by the Singapore Taxi Academy, and cleared a series of written tests. Taxi operator SMRT agreed to let him have a four-month-old Toyota Prius taxi for a fortnight rent-free, with all his takings donated to The Straits Times School Pocket Money Fund.

Next week, Yong Chuan will describe working with the elderly.
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