Changing dynamics of the taxi and car hire trade in Singapore

Looks like Uber is going all out. LTA and the Govt have generally thrown in the towel.

http://news.asiaone.com/news/transport/fierce-bidding-uber-keeps-coe-prices
Fierce bidding by Uber keeps COE prices up


Fuelled by aggressive bids from Uber, certificates of entitlement (COEs) for cars ended higher at the latest tender yesterday, despite the prospect of a bigger quota two weeks from now.

COEs for cars up to 1,600cc and 130bhp ended 2.8 per cent higher at $47,300. Those for cars above 1,600cc or 130bhp finished 5.5 per cent higher at $49,602.

The Open category, which can be used for any vehicle type but ends up mostly for bigger cars, closed 4.2 per cent higher at $49,501.

Checks by The Straits Times revealed that Uber-owned Lion City Rental submitted 630 bids in the three categories, and succeeded in obtaining 510 COEs.

In the previous tender, it secured 270 COEs from 810 bids submitted.

Uber's COEs yesterday constituted 14 per cent of total successful bids in the three categories - a disproportionately high percentage for a newcomer which entered the market barely four years ago.

Industry watchers said upward pressure on bids may also come from other private-hire companies such as Grab and SMRT's new outfit, Strides.

Mr Neo Nam Heng, chairman of diversified motor group Prime, said: "Everybody is focusing on private-hire cars now. That is why premiums should have dropped, but have not."

He said that besides Uber, many other private-hire players are waiting to secure COEs, too. "But over the longer term, with more COEs on the way, there should still be enough for consumers," he added. "So, there is no need to rush or panic."

Meanwhile, the commercial vehicle COE fell by 2.7 per cent to close at $43,002.

The motorcycle premium was flat at $6,501, just $2 lower than its previous price two weeks ago.

Overall, a total of 7,203 bids were submitted, 11 per cent fewer than two weeks ago.

- See more at: http://news.asiaone.com/news/transport/fierce-bidding-uber-keeps-coe-prices#sthash.eLomh9iq.dpuf

I used to view Uber or Grab in bad light but now I applaud them as they hv exposed the older taxi companies as not so honourable in ripping off taxi drivers and commuters....... where is Kwa Hong Park who made a lot of money from taxi operations???? Is he still polishing LHL's shoes in Teck Ghee after got thrown out of SPH losing the fight with Alan Chan for control of the news juggernaut////////////

Kwa Hong Park, Goh Chee Wee etc made their money on the backs of taxi drivers. Watch as they move to better things when real competition starts coming in.

Pek Kim Lui said:

I used to view Uber or Grab in bad light but now I applaud them as they hv exposed the older taxi companies as not so honourable in ripping off taxi drivers and commuters....... where is Kwa Hong Park who made a lot of money from taxi operations???? Is he still polishing LHL's shoes in Teck Ghee after got thrown out of SPH losing the fight with Alan Chan for control of the news juggernaut////////////

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Big bucks in good times or bad


The Star, Malaysia

October 13, 2002

Insight Down South with SEAH CHIANG NEE


IN a surprising twist, Singaporeans found themselves facing an old problem they hoped not to see in the 21st century: a journalist banned from covering news for upsetting authority.
This time it was not the government that dished out the punishment but the chief executive of Comfort, a public-listed taxi operator. (The company is associated with the trade union movement, NTUC, which in turn is linked to the government.)

Managing director Goh Chee Wee was upset by what he considered a “vicious and personal attack” on him by Business Times reporter Christopher Tan.

In an internal memo to his staff, Goh instructed that the reporter be barred from all company events after his two offending articles.

In the first, Tan had reported that Goh received S$1.43mil in remuneration last year, a figure that shocked Singaporeans in a hard-hit economy where everything is coming down.

Tan then followed up with an analysis titled: “Is Goh Chee Wee deserving of S$1.43mil package?”

It noted that Comfort’s earnings had come from taxi rentals and Goh had made property investments in the late 1990s that lost money.

Like in America, the question of high management payments has become a sensitive matter in economic-troubled Singapore.

The ban provoked an angry public reaction and was shortly lifted by Goh.

In another controversy involving another government-linked company, ST Assembly Test Services had paid its former chief executive, Tan Bock Seng, “consulting fees” of S$465,000 a month for six months beginning January.

It went undisclosed for months allegedly due to an oversight. Bock Seng was also paid S$1.8mil bonus in recognition of his services.

The benefits were paid while the company, Asia’s No. 2 chip tester, had just reported a loss of S$38.6mil in the second quarter.

While neither party has committed any offence, the sums involved were large enough to shock many Singaporeans.

With workers suffering pay cuts and the worst job losses in history, company profits weakened and share prices remaining in a black hole, it is poor timing for high executive pay anywhere.

There is already a strong backlash against this trend in America, where the remunerations involved far overshadow even the worst case in Singapore.

For years, Singapore’s corporate culture had closely tracked that of America, including the exorbitant way its corporate executives were paid.

In an effort to turn themselves into global entities, several Singaporean banks and government-linked companies had offered top dollar in recruiting world talent from both East and West.

Some were evidently overpaid in relation to their performance. Subsequently, a few left.

Singapore was not alone in the high paying game. From Tokyo to Taipei, Milan to Mexico City, executive pay was – and still is – rising and sweeteners such as bonuses and options were being stirred into the mixture.

But two factors are currently forcing a slowdown: the economic downturn and a public revolt against excesses in America.

Recent cases of corporate greed in Enron, Qwest Communications and 21 other companies whose accounting is under investigation have resulted in a public backlash.

Even before the collapse of Enron, shareholder and employee representatives worldwide had already been taking a much larger interest in CEO pay.

In America, CEO greed has been soaring out of control. According to Business Week, the average executive of a major US corporation made 42 times more than a typical factory worker in 1980. By 1990, that ratio was 85 times and in 1998, it had reached a staggering 419 times.

At this rate, the average CEO would make the salary equivalent of more than 150,000 American factory workers in 2050.

The former head of Apple Computer, Gilbert Amelio, is a great example. As the Wall Street Journal noted in its executive pay report, Apple lost nearly US$2bil during Amelio’s brief tenure of 17 months.

About 3600 employees lost their jobs. Amelio’s golden parachute included US$6.7mil in severance pay plus other compensation.

In whatever society, excessive CEO payments have an implicit message: the chief deserves nearly all the credit for the company’s success.

In the crazy world of corporate compensation, some excesses are taking place that should not. CEOs, for example, rake in millions through good times and bad while workers are downsized and get pay cuts.

Wall Street executive Julian Robertson says it well: “Everybody here is overpaid, knows they are overpaid and is determined to continue to be overpaid.”

Banker J.P. Morgan feels that the proper ratio “between the top people and the rank and file should be 20-fold, post-tax. Beyond that, you create social tension.”

Proponents say that competitive payments are necessary. As corporations become more multinational, they have to compete for talent. And that can cost plenty.

“Big companies are starting to realise that they’re in an international market for staff,” says a consultant who specialises in executive compensation in Europe.

“When you have a multibillion-dollar market cap, you don’t want to get a second or third-choice CEO. Paying a really skilled CEO a lot of money can still be a bargain in the long run.”

Japanese CEOs, including those running large worldwide companies, come out looking like paupers compared to their American counterparts.

Their average earnings range from US$300,000 to US$500,000 on average, with bonuses averaging a measly 10 percent. Remuneration in Singapore is larger by comparison.

In fact, Singaporean bosses in major companies are the second highest paid in Asia, next to Hong Kong.

The latest survey shows executive remuneration in the republic is 37 times the average employee earnings compared to 38 for Hong Kong.

Other ratios are: Thailand (23 times), Australia (22), Shanghai, China (21) New Zealand (16), Taiwan (15), South Korea (11) and Japan (10).

Singapore, like other cities, are pressurised by the American practice to raise their defences to hold on to talents.

One factor calls for special caution here. Many of the large corporations are government-controlled.

In normal companies, public investors act as guardians against excesses; but with these Temasek-controlled ones, the duty rests with the government.

Seah Chiang Nee is a veteran journalist and editor of the information website littlespeck.com

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http://www.bloomberg.com/news/artic...inspires-man-to-ditch-family-riches-for-taxis




Anthony Tan, founder and chief executive officer of GrabTaxi Holdings Pte Ltd.
Source: GrabTaxi via Bloomberg


Anthony Tan was a student at Harvard Business School when a classmate pulled him aside to gripe about how hard it was to hail a cab in Malaysia.

“What’s wrong with your taxi system?” said Tan, recalling the complaint about his country three years ago. “Your great-grandfather was a taxi driver, your grandfather started the Japanese auto industry in Malaysia, so do something about it.”

Tan drew up a business plan for an Uber-like service that won backing from angel investors, leading the youngest of three brothers to quit the family business in 2012 to start GrabTaxi, a mobile application that assigns available cabs nearby to commuters using mapping and location-sharing technology.

The business has grown to become Southeast Asia’s largest taxi-booking mobile application, attracting Singapore’s $171 billion Temasek Holdings Pte among its investors. That wouldn’t have happened had he stayed on at his job as head of marketing at Kuala Lumpur-based Tan Chong Motor Holdings Bhd., Nissan Motor Co.’s sole distributor in Malaysia run by his father Tan Heng Chew.

“He didn’t disown me last time I checked,” Tan, 33, said of his father in an interview in Singapore in late May. “Building something from scratch from just a PowerPoint and seeing the lives we affect is a lot more rewarding.”
Taxi Booking

GrabTaxi is capitalizing on the popularity of ride-sharing services that are sprouting up worldwide to meet growing demand for better ways to catch a cab in major cities. They follow the success of San Francisco-based Uber Technologies Inc., which said last week it had raised $1.2 billion in new financing, giving it a valuation of about $17 billion. That compares with the $15 million GrabTaxi raised in a second round of financing.

Instead of flailing unsuccessfully during rush hour or in bad weather, commuters can use GrabTaxi to track the assigned taxi on the smartphone as it arrives by curbside. Cabbies gain by not leaving the next fare to chance.

“There’s a wealth of opportunities for new apps if the developers can find a way to stand out,” said Mark Tanner, Shanghai-based founder of China Skinny, a digital marketing research firm. “You’ve got some formidable competition from Uber, which has deep pockets.”
‘Hyper-Growth Phase’

Uber is still in a “hyper-growth phase,” with revenue more than doubling every six months, Travis Kalanick, the company’s chief executive officer and co-founder, said in a June 9 interview on Bloomberg Television. The service is now in about 40 countries and 130 cities, including Kuala Lumpur, he said.

Tan’s app is available in Singapore, Malaysia, Thailand, Vietnam and the Philippines, and has 250,000 active users and more than 25,000 drivers, according to the company. GrabTaxi is targeting to quadruple the number of bookings to 120 per minute in the “next few months,” and is aiming to gain 1 million users, said Tan.

Funding Plan

GrabTaxi may consider an initial public offering when the number of rides booked reaches 2 million a day, he said, declining to be more specific beyond saying a share sale “won’t happen next year.” The company also offers a limousine service option, called GrabCar, with the app.

The company has raised more than $15 million in a second round of financing after garnering at least $10 million in an earlier round. Tan declined to provide details that would give a valuation of GrabTaxi.

Besides Temasek, which invested through wholly owned unit Vertex Venture Holdings Ltd., GrabTaxi also attracted funding from Menlo Park, California-based GGV Capital, which has backed companies such as Alibaba Group Holding Ltd. and Flipboard Inc.

Mobile apps are increasingly popular in Asia.

Didi Taxi, with 100 million passenger users and 1 million taxi drivers signed up in China, plans to hold an IPO in three to five years, preferably in the U.S., Zhang Bo, the company’s co-founder, said in an interview in Beijing last month.

Uber Valuation

“There’s some demand, but I don’t know if all of these companies will be able to make as much money as they have hoped,” said Terence Fan, an assistant professor for strategic management at Singapore Management University. “The market in Southeast Asia is much smaller compared to even the smaller cities in China.”

On a rainy weekday morning in Singapore last month, using GrabTaxi’s service resulted in a vehicle arriving in about 15 minutes. By comparison, no cabs were available at the time when calling a taxi company’s automated call-center booking hot-line.

The assigned cab driver, Jenny Yeo, said the app has helped boost her income by about 15 percent.

“It reduces the amount of aimless cruising and allows me to better plan my routes,” Yeo, 45, said in an interview during the ride from a northern suburb to the city’s central business district. “You know where the passenger wants to go before they even get on. As a lady driver, you also feel safer because the passenger details are logged.”

Rising Demand

Tan predicts demand will continue to grow in Southeast Asia as smartphone usage increases in the region. Less than 6 percent of taxi rides are booked through mobile apps in Singapore, while in the Philippines and Indonesia, it’s under 2 percent.

To ensure that the drivers have the necessary equipment, GrabTaxi buys smartphones in bulk in all the countries it operates in, except Singapore. The company then issues the phones to the drivers, who pay for them in daily installments.

“Our biggest competitor is the hand,” or street hailing, Tan said. There are no near-term plans to expand into India or China, he said.

Family Roots

Though Tan left the family business, in a way, he’s going back to his roots. His great-grandfather drove taxis.

It was the younger Tan’s grandfather and granduncle who founded Tan Chong Motor, which began as a distributor of small motor vehicles in the 1950s before assembling cars for Nissan in Malaysia.

Tan joined the family business after graduating from the University of Chicago, starting on the factory floor before stints in various departments, including in customer service and marketing. His two older brothers still work at Tan Chong.

“I lived under my grandfather’s shadow,” said Tan, who had bodyguards until he was 13 and whose chauffeur in Malaysia now spends most of the time taking jobs on GrabCar when he’s out of the country. “The name is established in the region and it was quite tiring.”

With GrabTaxi, “whether it will pay off financially or not, I don’t know,” he said. “I think that it’s not as important as knowing that this is my one shot at making a difference.”

UBER





Travis Cordell Kalanick (born August 6, 1976) is an American entrepreneur. He is the co-founder of the peer-to-peer file sharing company Red Swoosh and the transportation network company Uber.

In 2014, he entered the Forbes list of the 400 richest Americans at position 290, with an estimated net worth of $6 billion.[2]

Kalanick was born on August 6, 1976 in Los Angeles, California. He lived in Northridge, California, where he graduated from Granada Hills High School and later enrolled in college at the University of California, Los Angeles, to study computer engineering.[3][4][5] While at the University of California, Los Angeles he joined the Theta Xi Fraternity. His mother, Bonnie, worked in retail advertising for the Los Angeles Daily News, and his father, Donald, was a civil engineer[6] for the city of Los Angeles.[7] His father Donald E. Kalanick's family is Catholic with Czech and Austrian roots.[8][9][10][11] Travis C. Kalanick was born to a Jewish mother (her maiden name is Horwitz) in Los Angeles.[12] He has two half-sisters and his brother Cory is a firefighter.[7][13]

Uber

In 2009, along with Garrett Camp, Kalanick founded Uber, a mobile application that connects passengers with drivers of vehicles for hire and ridesharing services.[22][23][24] Uber operates in 58 countries and in more than 300 cities around the world.[25][26][27] Uber faced some controversy[28] in some cities in North America,[29] like Washington DC,[30] Chicago,[31] Toronto,[32] and New York City.[33][34] The company faces fierce competition from similar services[35] and "clone companies"[36] in cities like London.[37][38] In November 2014, Kalanick faced criticism for creating a "win at all costs" culture in his Uber organization. Public relations problems the firm faced included Kalanick's comments to GQ about how easy it is for him to attract women now, concern about his blasé attitude regarding safety issues for female customers, and his tolerance of executive Emil Michael, who recommended creating a large budget to smear critics. While Kalanick apologized for Michael's remarks, he did not censure him severely enough to appease some critics.[39]