ComfortDelGro's taxi fleet declines 5.7% to 15,863 in April

It has 16,281 cabs in December.

Citing industry figures from the Land Transport Authority, UOB Kay Hian said ComfortDelGro's taxi fleet has declined sharper than expected.

The transport authority figures for April point out to a 5.7% decline in ComfortDelGro's taxi fleet to 15,863. This is a significant fall from 16,281 in December.

"We understand fleet downsizing is part of the group’s strategy to rein in idle rate to an optimal level (estimated 1-3%). However, as the contraction was steeper than what we had expected, we have increased our 2017-18 fleet assumptions to an average annual decline of 3-5% yoy (from 2%)," UOB Kay Hian analysts Andrew Chow and Thai Wei Ying said.

The two analysts estimated every 1% decline in fleet size to reduce the group's yields by 2%.

Whilst there is a slump in its taxi fleet, its rental cars have increased 78% YoY. Correspondingly, however, the average daily taxi mileage for both one-shift and two-shift had also declined 7% to 8% yoy respectively.

"This also implies that taxi drivers are getting less income on a daily basis. We believe the average daily mileage for taxis will continue to decline going forward, a reflection of the growing supply of drivers," Chow and Thai said.