As announced at the Ministry of Transport’s Committee of Supply 2025, the Land Transport Authority (LTA) will be implementing several measures to improve the stability, contestability and inclusivity of the point-to-point transport (P2P) industry.
Updated Regulatory Regime for Taxis and PHCs
2. Taxis are important for meeting P2P demand for two main reasons. First, unlike Private Hire Cars (PHCs) which are also used for personal trips, taxis provide more consistent supply throughout the day and can meet a broader range of commuter needs such as boot space for luggage and folded wheelchair. Second, taxis offer street-hail services, which are important for commuters who may be less familiar with ride-hail apps, as well as at locations with high demand, such as airports and ferry terminals.
3. However, the taxi fleet has more than halved over the past decade, from around 28,700 taxis in 2014 to around 13,100 taxis in 2024. Compared to PHCs, taxis incur higher operating costs due to differences in the regulatory regimes, with taxis subject to more restrictions. For instance, unlike PHCs, taxis cannot be converted and resold, and only new vehicles can be registered as taxis. These differences translate to higher vehicle rental costs for taxi drivers. Taxi operators are also subject to an annual growth cap of 2% on their fleets. In Phase 1 of the P2P review, LTA announced various changes to the regulatory regime for taxis and PHCs which took effect from 1 January 2025:
i. Extend the statutory lifespan of taxis from eight to 10 years;
ii. Reduce the inspection frequency for taxis below three years old to once a year;
iii. Increase the inspection frequency for PHCs above 10 years old to once every six months;
iv. Remove call-booking requirements for smaller taxi operators.
4. LTA will introduce further measures to provide taxi operators with greater flexibility to manage their operating costs and support them in growing their taxi fleet. This will work in tandem with measures in the PHC sector to narrow the regulatory gap between the two types of vehicles providing P2P services:
a. 2% annual taxi fleet growth cap to remain suspended. In 2021, following the COVID-19 pandemic, LTA suspended the 2% annual growth cap to enable taxi operators to replenish their fleet to pre-pandemic numbers. LTA will continue to suspend the growth cap. Taxi operators can thus grow their fleets by more than 2% a year, based on their growth plans and fleet productivity.
b. Taxi operators will be allowed to convert used vehicles that are less than five years old to taxis, subject to LTA’s approval. This will provide taxi operators with an additional option to grow their fleets.
c. Taxi operators will be allowed to resell taxis that are more than three years old, up to 5% of their taxi fleets annually. This will reduce operators’ risks in trialling new taxi models, such as multi-purpose vehicles which are costlier but can better serve commuters who need larger vehicles.
d. On 19 February 2025, LTA also announced a three-year lock-in period for business-owned chauffeured PHCs (cPHCs). This ensures that businesses who acquire cPHCs do so predominantly for the purpose of leasing them to drivers providing ride-hail services and prevents the premature conversion of such cars out of the cPHC scheme.
e. With immediate effect, LTA will require the disclosure of a vehicle’s PHC/taxi history for all newly registered cars using Certificates of Entitlement (COEs) obtained from the COE bidding exercise ending 5 March 2025 or later, and newly converted or transferred chauffeured or self-drive PHCs. This will also apply to taxis that are resold, and improve transparency in the resale market.
Strengthen Contestability
5. Our current regulatory framework for the ride-hail sector seeks to ensure that drivers and commuters are free to choose which platforms to drive for, and ride with respectively. To achieve this, all operators have to abide by the multi-homing principle, which prohibits exclusive arrangements between drivers and operators that limit choice.
6. As the ride-hail sector is a matching market, large operators are naturally better able to match drivers and commuters. Therefore, large operators should bear greater responsibility to set market norms that continue to protect the interests of commuters and drivers. To further protect driver and commuter choice, LTA will subject large operators to additional responsibilities, including higher data disclosure obligations to LTA as regulator. This builds on our broader regulations to promote multi-homing, and provides greater assurance to drivers and commuters that large operators will not implement practices that restrict drivers’ or commuters’ choice.
7. LTA will consult sector stakeholders as we review our rules, to ensure all operators can continue to innovate and improve service offerings. These requirements will also be designed iteratively, based on trends and practices in the sector.
Improve Commuter Experience and Access to P2P Rides
8. As our demographics continue to shift, the P2P sector will need to meet new and different needs. For instance, seniors and other commuters with special mobility needs may come to rely more on P2P services for their medical appointments. In a recent LTA-commissioned survey conducted with seniors, the most common challenge cited was difficulties navigating the ride-hail application interface. To address these pain points, LTA will launch a P2P Inclusivity Co-funding Grant, which provides co-funding of up to 50%, capped at $500,000, for the development of ideas that can improve access to P2P services.
9. In response to requests from PHC drivers and commuters, LTA will convert nine most frequently used taxi stops in the Central Business District to “P2P stops”, which can be used as pick-up and drop-off points by taxis and PHCs. This will make P2P services safer and more convenient for all commuters. Taxi stands, where taxis can queue to pick up street-hail commuters, remain reserved for taxis only.
Implementation of Phase 2 Measures
10. As some of the proposed changes will require adjustments to operational plans and services, LTA will continue to consult operators, the National Taxi Association, and the National Private Hire Vehicles Association on the implementation plans. More details will be provided at a later date.
