Will This New Development Put a Further Dent in ComfortDelGro Corporation Ltd’s Taxi Business?
ComfortDelGro Corporation Ltd (SGX: C52) is one of the world’s largest land transport companies with businesses that include bus, taxi, rail, and inspection and testing services.
Recently, the land transport giant did not perform well financially. For the third quarter ended 30 September 2017, its taxi business posted an 11.2% decline in revenue to S$298.3 million due to “increased competition”, which brought about a smaller operating fleet.
It could get worse, as BlueSG, the first large-scale electric car-sharing scheme in Singapore, will start operations next week with 80 cars.
There will be two price plans – one that has a monthly subscription of $15, and 33 cents per minute of use, while the other charges no monthly fee but 50 cents per minute.
According to calculations by The Straits Times, “the first plan works out to $10.65 for a half-hour slot for a driver who uses the car 20 times a month, while it is $15 in the second plan”. This is similar to cab fares, depending on the time of day. For example, the off-peak taxi fare is about $12 for a 20-minute ride.
For a start, there will be 30 BlueSG stations and 120 charging points all over Singapore by the end of this month. The company plans to “expand its fleet to 1,000 electric vehicles and install 2,000 charging points by 2020”.
It looks like for now, BlueSG might not affect ComfortDelGro’s business due to the former’s relatively small size and dispersed vehicle stations across the island.
However, it could be a different story three years from now if BlueSG gains market share, with the stations being very accessible for car pick-up and drop-off.