Taxi operators can convert used cars into taxis in move to level playing field with private-hire cars

SINGAPORE: Taxi operators will have greater flexibility in managing their fleets, with new regulations allowing them to convert used cars that are less than five years old into taxis, said Senior Minister of State for Transport Amy Khor on Wednesday (Mar 5). 

The change, announced in parliament as part of the Ministry of Transport’s (MOT’s) spending plans for the year, gives operators an additional option to expand their fleet, which may help reduce costs, Dr Khor said.

Operators who want to convert used cars to taxis will have to seek the Land Transport Authority’s (LTA) approval. 

This is one of the measures that the ministry is implementing to further level the playing field between taxis and private-hire cars (PHCs).

Taxi operators will also be allowed to resell taxis that are more than three years old, up to 5 per cent of their fleet. This move aims to reduce operators’ risk in trialling new taxi models, such as multi-purpose vehicles (MPVs), which are more expensive but better suited for commuters needing larger vehicles, said Dr Khor. 

The 2 per cent annual cap on taxi fleet growth will also remain suspended, so that operators can continue expanding their fleets beyond 2 per cent a year. The cap, which was first implemented in 2013, has been suspended since 2021 to enable taxi operators to replenish their fleet following the pandemic. 

The measures require time to operationalise, said LTA in a statement.

It will continue to consult taxi operators, the National Taxi Association, and the National Private Hire Vehicles Association on the implementation plans, and more details will be provided at a later date.

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, said LTA.

Compared to PHCs, taxis incur higher operating costs due to differences in the regulatory regimes, with taxis subject to more restrictions, translating to higher rental costs for taxi drivers, the authority added.

“These moves give taxi operators more flexibility to manage cost and grow their fleet,” said Dr Khor. “They complement our moves in the PHC sector to further level the playing field between taxis and PHCs.”