1 Chart to Show the State of ComfortDelGro Corporation Ltd’s Singapore Taxi Business Now
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. It operates in seven countries, including Singapore.
Geographically, for the 2016 financial year, Singapore contributed to 62.7% of total revenue. In terms of business segments, the taxi business made up 33% of total revenue. Therefore, it is safe to say that the Singapore taxi business contributes to a chunk of the taxi revenue.
It is not surprising that for the third quarter ended 30 September 2017, ComfortDelGro’s taxi business saw an overall 11.2% year-on-year decline in revenue to S$298.3 million on the back of “increased competition,” which brought about a “smaller operating fleet” in Singapore.
I said it is “not surprising” as the taxi fleet size in Singapore is no secret. The Land Transport Authority (LTA), which oversees the land transport sector in Singapore, releases taxi population statistics on its website monthly.
From July 2017 to September 2017 (which corresponds to the third-quarter of 2017), the average taxi fleet for ComfortDelGro was 15,141, but for the same period one year ago, the figure was much higher at 16,965. The latest average value represents a 10.8% year-on-year decline, hence the “smaller operating fleet” that ComfortDelGro cited.
Now, let’s turn our attention to the longer term picture.
As of 30 September 2017, the number of ComfortDelGro taxis in Singapore was 14,823. Back in September 2005, the figure was higher at 15,768. The following chart shows the taxi fleet size of ComfortDelGro over the past 12 years:
The graph shows that ComfortDelGro’s taxi fleet has declined dramatically in September 2017 as compared to September 2016. Increasing competition from ride-hailing apps has indeed hampered ComfortDelGro’s taxi business.
A few days back, ComfortDelGro announced that it will form a joint venture with Uber’s wholly-owned Singapore car rental subsidiary, Lion City Holdings Pte Ltd, in a 51:49 deal. The two companies are also “finalising additional partnership opportunities.”
Could ComfortDelGro’s partnership with Uber bring the former’s taxi business back to its glory days? Only time will tell. However, it won’t be easy as ComfortDelGro has to regain lost revenues due to the drop in the size of its taxi fleet.