Singapore cross-border ride-hailing ban gets backing

Licensed taxis may be enough to meet the demand.

Analysts backed Singapore’s decision to keep a ban on cross-border private ride-hailing service with Johor Bahru, Malaysia, citing adequate options and potential risks to the local taxi industry.

Terence Fan, assistant professor of strategy and entrepreneurship at Singapore Management University, said licensed taxis are sufficient to meet the demand.

“During certain festive seasons, demand seems to outstrip current supply,” he told Singapore Business Review. “However, outside of this season, the current supply of cross-border taxis seems to be more than capable of handling the demand.”

The government on 3 August said it would not open the route to private-hire cars, keeping cross-border travel limited to licensed taxis under the Cross Border Taxi Scheme, which allows about 200 taxis from each side.

The city-state is unlikely to allow ride-hailing vehicles to cross the border unless alternatives can’t handle demand regularly, Fan said in an emailed reply to questions.

Daniel Chow, principal at Arthur D. Little Southeast Asia, said commuters already have other licensed public transport options, including cross-border buses and the Johor Bahru–Singapore Rapid Transit System, scheduled to begin service by late 2026.

He said opening the route to private-hire vehicles could erode taxi ridership, which is already below capacity. “The decision, while restrictive, is justified and strategically sound from a transport policy perspective.”

Masaki Honda, vice president of mobility at Frost & Sullivan, said cross-border ride-hailing would be difficult to enforce.

“It is very complex to harmonise regulations between Singapore and Malaysia,” he said in an email. He added that restrictions ensure safety, keeping oversight within Singapore’s transport ecosystem.

Fan agreed that enforcement would be difficult. “How can we catch nonconforming vehicles or drivers if they are out of Singapore, or if they are in Singapore for only a short amount of time?” he asked.

Timothy Wong, a senior economics lecturer at the National University of Singapore, cited the  need to keep safety and driver standards.

“If Malaysian cars are allowed to provide trips into Singapore and return to Malaysia with passengers, our safety and driver standards should still be upheld,” he said via Zoom. Lowering these standards, he added, could undermine consumer confidence in ride-hailing services.

Fan said letting private-hire operators work across the border could draw more drivers away from taxis, given lower rental costs and greater flexibility. Singapore’s taxi fleet had fallen to 12,261 as of July from 13,343 a year earlier, while the number of private-hire cars rose to 93,966 from 85,881.

Restricting cross-border access helps protect the taxi sector, he said. “It creates reasons for taxi drivers to feel that at least, some of their business is protected.”

Chow said local taxi firms, even those with their own booking apps, would be disadvantaged compared with regional players such as Grab, which could more easily use cross-border networks. He also noted that Malaysian operators benefit from lower fuel and maintenance costs, while Singapore’s stricter licensing raises compliance expenses.

Honda warned that liberalisation could see Malaysian drivers offering lower fares, leading to “significant trip losses” for Singaporean drivers.

The Land Transport Authority said it is working with Malaysian counterparts to improve the Cross Border Taxi Scheme, including introducing app-based bookings for licensed taxis and adding more boarding and drop-off points.

Cross-border taxis can only operate between Ban San Street Terminal in Singapore and Larkin Sentral in Johor Bahru.

Honda said the quota is underused partly because of the single pick-up and drop-off point on each side. He proposed revising licensing and using platforms such as Grab or Gojek to make transactions transparent.

Wong also suggested encouraging shared taxi rides. “There might be many people who are willing to share a ride to get across the border, and to some extent, the authorities may want to encourage that,” he said.

Allowing more taxis without promoting ride-sharing could worsen congestion, he said. “If two people from a similar location in Singapore are heading to a similar location in Johor Bahru, you should incentivize them to share a taxi for that trip.”