Senior Minister of State for Transport Sun Xueling on Malaysian cross-border point-to-point services

Key Concepts

• Illegal Point-to-Point (P2P) Services: Unlicensed transport services operating outside regulatory frameworks.
• Cross-Border Taxi Scheme (CBTS): A regulated framework for taxis operating between Singapore and Malaysia.
• Liberalization: Relaxing restrictions to allow greater flexibility in service provision.
• Designated Pickup Points: Specific locations where foreign taxis are permitted to pick up passengers to prevent infringement on local markets.
• Reciprocal Basis: Agreements where both countries offer similar concessions or arrangements to each other.
• Location Tracking (ERP 2.0, On-Board Units - OBUs): Technologies used to monitor vehicle movements and ensure compliance.
• Fair Competition: Ensuring a level playing field for licensed operators from both countries, considering cost disparities and exchange rates.
• Cost Disparities: Differences in operational costs (e.g., fuel, maintenance, licensing) between Singapore and Johor Bahru.
• Undercutting of Fares: Offering services at prices significantly lower than regulated or reasonable rates, often associated with illegal operations.
• Private Hire Vehicles (PHVs): Non-taxi vehicles providing pre-booked transport services.
• Ride-Hailing Apps: Mobile applications facilitating the booking of transport services.
• Decals/Livery: Distinctive markings or branding on vehicles indicating their licensed status.
• Content Takedown Orders: Legal directives to remove online content, particularly that promoting illegal activities.

Introduction: Enforcement and Demand for Cross-Border Services The Land Transport Authority (LTA) has been actively conducting enforcement operations against illegal point-to-point (P2P) services. Since July of the current year, the LTA has impounded 107 vehicles whose drivers were caught providing such illegal services. This enforcement activity is set against a backdrop of significant commuter demand for more convenient cross-border P2P services, prompting the Ministry of Transport (MOT) and LTA to explore options for enhancing existing arrangements.

Proposed Enhancements to the Cross-Border Taxi Scheme (CBTS) The MOT and LTA are discussing with Malaysian authorities possible options to liberalize the existing Cross-Border Taxi Scheme (CBTS). Key proposals include:

• Flexible Drop-offs: Allowing Malaysian cross-border taxis to drop off passengers anywhere in Singapore, and Singaporean taxis to do likewise in Johor Bahru (JB). This aims to provide greater convenience for commuters from both countries.
• Minimizing Illegal Trips: To prevent foreign taxis from cruising empty and potentially conducting illegal trips, these taxis would only be permitted to pick up passengers at designated points. This measure is designed to prevent infringement on the local P2P market.
• Expanded Pickup Points: For enhanced commuter convenience, more pickup points will be identified in both JB and Singapore. These discussions with Malaysian authorities will be on a reciprocal basis.
• Stakeholder Engagement: The MOT and LTA will continue to engage with the National Taxi Association (NTA) and the National Private Hire Vehicles Association (NPHVA) to gather their suggestions.
• Technological Enforcement: The ministry is exploring the use of location tracking, including ERP 2.0 zero and other measures, to prevent illegal trips by cross-border taxis within Singapore.
• Continued Enforcement: The LTA will maintain its enforcement efforts even after the planned enhancements to the existing arrangements are rolled out.

Addressing Fair Competition and Earning Opportunities Ms. Yu-Li Koh, adviser to the NTA and NPHVA, highlighted the deep social and economic ties between Singapore and Malaysia, noting that the scheme is a livelihood stream for 200 Singapore cross-border drivers. She raised concerns about ensuring fair competition and expanding earning opportunities.

• Technology for Fair Competition: She questioned how technology, such as online booking platforms and in-vehicle tracking units, would ensure fair competition between Singapore-licensed and Malaysian-licensed vehicles, given fare and exchange rate differences.
  • The Senior Minister of State (SMS) acknowledged significant unmet demand for cross-border travel. She stated that some taxi operators already utilize online booking forms and phone calls for doorstep pickups.
  • Crucially, the installation of On-Board Units (OBUs), especially on foreign taxis, will enhance location tracking. Right-hailing platform operators' technology will also be leveraged for this purpose, aiming to prevent foreign vehicles from conducting illegal P2P trips in Singapore.
• Fares and Cost Disparities: Regarding fares, the SMS indicated that discussions would be held with the NTA and NPHVA to determine "reasonable fares." These discussions would take into consideration the cost disparities between operating and driving in Singapore versus Johor Bahru.

Expanding the Scheme: Fleet, PHVs, and Drop-off Points Mr. Ang Wei Neng, CEO of Strides Premier (a cross-border taxi service provider), posed further questions:

• Fleet Expansion: He inquired about plans to expand the current fleet of 200 cross-border taxis and whether monthly application submissions would be allowed instead of the current annual restriction.
  • The SMS confirmed that discussions with Malaysia include a higher quota of taxis for each country, the introduction of larger MPV taxi models, and the use of ride-hailing apps for bookings.
• Private Hire Cars (PHVs) and Undercutting: He asked about expanding the service to PHVs and how to prevent undercutting of fares, given that operating costs for P2P vehicles in JB are a "small fraction" of those in Singapore.
  • The SMS stated that approaching PHVs would be done cautiously. The local NPHVA is concerned that wide liberalization without a separate scheme for PHVs could lead to foreign PHVs providing illegal P2P services in Singapore.
  • A critical requirement is that any foreign vehicle operating in Singapore must possess the necessary decals and livery to clearly indicate it is part of a licensed scheme negotiated between both countries, rather than an individual PHV conducting illegal trips.
  • Regarding undercutting, the SMS reiterated the importance of effective enforcement, OBU installation for location tracking, and platform operators' technology to track vehicles.
• Number of Drop-off Points: He questioned the planned number of drop-off points, asking if it would be 5, 10, or 20, given that currently there is only one designated drop-off point in JB and one in Singapore. The SMS did not provide a specific number but confirmed the intent to increase them.

Regulating Ride-Hailing Apps and Preventing Undercutting Mr. Melvin Yong raised concerns about overseas-registered ride-hailing apps offering cross-border services.

• App Recognition and Enforcement: The SMS clarified that such apps must be recognized by both Singapore and Malaysia. Apps not endorsed by local authorities will be investigated to prevent the proliferation of un-discussed apps and the conduct of illegal P2P trips.
• Preventing Undercutting (Reiteration): When pressed again on preventing undercutting due to cost differences, the SMS stated that the review of the CBTS would involve consulting associations to ensure "reasonable fares" for passengers while assuring Singaporean drivers of the viability of cross-border trips given their operational costs. She emphasized that concerns about undercutting often relate to illegal services, and for such services, strict enforcement would be applied against providers whose fares undercut pre-negotiated rates.

Combating Illegal Services via Chat Groups and Unauthorized Apps Associate Professor Jamus Lim highlighted that illegal ride-hailing services are offered not only via unauthorized apps but also through chat groups.

• Pervasiveness and Crackdown Plan: He inquired about the ministry's understanding of the pervasiveness of these services and its plan to crack down on them (e.g., using "secret shopper" methodologies).
• Legal Powers and Enforcement: The SMS confirmed that under Singaporean laws, the government can order the takedown of content linked to illegal activities, with non-compliance potentially leading to enforcement actions like blocking access or app removal.
  • The MOT and LTA are seeking further legal powers to ensure online platforms comply with LTA's removal requests for illegal P2P services if they remain unresponsive.
  • The LTA is actively conducting operations to infiltrate these chat groups and take action against service providers. While specific operational details cannot be shared, the LTA is fully aware of the situation.

Conclusion: Main Takeaways The discussion highlights a multi-faceted approach by the Singaporean government to enhance cross-border transport services while rigorously combating illegal operations. Key takeaways include:

1. Liberalization with Controls: The government is exploring liberalizing cross-border taxi services with Malaysia to improve commuter convenience, but with strict controls like designated pickup points and location tracking to prevent illegal activities and protect the local market.
2. Technology as a Double-Edged Sword: Technology (online booking, OBUs, ride-hailing apps) is seen as crucial for both enhancing legitimate services and for enforcement (location tracking). However, unauthorized apps and chat groups also pose a challenge for illegal operations.
3. Fairness and Viability: A significant focus is placed on ensuring fair competition and viable livelihoods for Singaporean drivers, considering cost disparities and preventing undercutting by illegal services. This involves ongoing consultations with industry associations and strict enforcement.
4. Proactive Enforcement: LTA's commitment to continued enforcement, including investigating unauthorized apps and infiltrating chat groups, underscores a proactive stance against illegal P2P services, supported by existing and potentially new legal powers for content takedown and platform compliance.