Here are early signs of taxi weakness.
Heigtened competition from private-hire cars is posing threat to taxi operator's profitability. Based on the latest data on the number of SoleProprietorships and Partnerships (SPP) for the Transport & Storage segment which shows a pick-up in recent months, research firm Maybank Kim Eng estimates that there are currently 9,100 private hire-cars.This is broadly in line with the government’s recent estimate of 8,000 to 10,000 private-hire car drivers during peak hours and NTUC’s estimate of around 6,000 to 8,000 full-time drivers.
As such, Maybank believes that it becomes now more challenging for taxi operators like ComfortDelGro (CDG) to get new drivers and it thinks that there is almost no queue to rent a new taxi now. "[CDG] may slow its fleet expansion plans to maintain utilisation," says MayBank analyst Derrick Heng.
Following are other early signs of taxi weakness:
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