Beyond the Meter: Stable Pay for UK Cabbies?

For decades, the life of a taxi driver has been synonymous with self-employment, freedom, and the unpredictable rhythm of the road. Income, too, often mirrors this unpredictability, fluctuating with demand, fuel prices, and the driver's own hours. But what if there was another way? What if the venerable black cab or private-hire vehicle driver could enjoy the security of a stable, fixed income, complete with employee benefits? This isn't just a hypothetical musing for British drivers; it's a bold new reality being trialled by ComfortDelGro, Singapore's largest taxi operator, and it raises pertinent questions for the global taxi industry, including our own shores.

The traditional model, where a driver essentially leases their vehicle and is responsible for all operating costs and commissions, has long been the standard. It offers immense flexibility and the potential for high earnings during peak periods, but it also comes with significant financial uncertainty. ComfortDelGro's pilot scheme represents a significant departure from this norm, offering a glimpse into what a future with salaried taxi drivers might look like, and whether it truly offers a better deal for those behind the wheel.

The Traditional Taxi Model: Freedom and Fluctuation

In the conventional taxi industry, drivers operate under what is often termed the 'hirer model'. This means a driver rents their taxi from an operator, paying a daily or weekly rental fee. After deducting this rental cost, along with fuel expenses and any commissions to the operator or booking platforms, the driver keeps the remaining fare revenue. This model provides unparalleled flexibility; drivers can choose precisely when and for how long they wish to work, making it an attractive option for those who value personal control over their schedule.

However, this freedom comes at a cost. Income under this model is highly susceptible to market forces and personal effort. A quiet day means less money, and unexpected vehicle maintenance or rising fuel prices can significantly eat into profits. There's no guaranteed income, no paid sick leave, and no annual holiday entitlement. Drivers bear the full brunt of market downturns and personal circumstances, leading to significant income volatility. This entrepreneurial approach demands drivers to be constantly strategising, optimising their routes, and chasing fares to maximise their earnings, without the safety net of employment benefits.

ComfortDelGro's Bold New Approach: A Salaried Proposition

In a groundbreaking move, ComfortDelGro, Singapore's dominant taxi operator, has introduced a pilot scheme that fundamentally alters the driver's relationship with the company. Instead of being independent contractors, drivers can now sign on as full-time employees, receiving a fixed monthly salary of S$1,800. This is a radical shift from the long-standing hirer model and is designed to provide drivers with a level of financial security previously unavailable.

Under this new arrangement, drivers commit to fixed driving hours: either 11 hours a day for four days a week or nine hours a day for five days a week. In return for this commitment, ComfortDelGro covers the cost of fuel – a significant expense for any driver – and provides a S$50 mobile phone allowance. More importantly, drivers gain access to comprehensive full-time employee benefits, including annual leave, medical leave, and contributions to their Central Provident Fund (CPF) accounts, which is Singapore's mandatory social security savings scheme covering retirement, healthcare, and housing. Drivers also have the opportunity to earn a bonus if they meet daily key performance indicators, though the specifics of these indicators have not been publicly detailed.

ComfortDelGro states that this scheme is a direct response to the diverse needs of taxi drivers. They recognise that some drivers prioritise the security and protection offered by full-time employment, while others prefer the flexibility and autonomy of the traditional model. By offering this choice, the company aims to not only boost driver availability but also to address unmet customer demand, ultimately leading to shorter wait times for passengers. This pilot programme is currently set to run until the end of March, with a target of hiring up to 50 drivers during this trial period.

A Look Back: HDT's Pioneer Effort and Its Fate

While ComfortDelGro's scheme is a first for the company, it isn't the first time a salaried taxi driver model has been attempted in Singapore. In 2018, HDT Singapore Holdings (HDT), an operator that ran a fully electric taxi fleet, offered a similar employment arrangement to its drivers. HDT was pioneering in its approach, not just with its employment model but also with its commitment to sustainable, electric vehicles.

At its peak, HDT operated 129 taxis, a considerably smaller fleet compared to ComfortDelGro's 10,801 at the time. Despite its innovative model, HDT ultimately ceased operations in December 2020. The primary reason cited for its shutdown was the severe decline in ridership caused by the COVID-19 pandemic. This raises an important question: did HDT's failure indicate a flaw in the salaried model itself, or was it simply an unfortunate casualty of unprecedented global circumstances, exacerbated by its smaller scale?

Transport economists suggest that HDT's downfall might not necessarily invalidate the salaried model. Its limited size meant it lacked the extensive market data and booking infrastructure that a behemoth like ComfortDelGro possesses. The pandemic's impact on a smaller, newer player would have been far more devastating, making it challenging to definitively attribute its closure to the employment model rather than external market pressures.

The Shifting Landscape: Taxis vs. Private Hire

The introduction of such a scheme by ComfortDelGro comes against a backdrop of significant changes in Singapore's transport landscape. The overall taxi population in the city-state has been in a steady decline since its peak in 2014, when approximately 28,000 taxis plied the roads. As of November last year, that number had more than halved to just over 13,600 taxis in operation. ComfortDelGro, despite remaining the largest operator, has also seen its fleet shrink considerably, from 13,244 taxis in December 2017 to 8,841 by October last year.

Conversely, the number of private-hire cars has surged. From 67,990 in 2021, this figure rose to 79,921 by November last year. This growth is partly attributed to the attraction of vehicle ownership for private-hire drivers, offering a different form of independence. Many traditional taxi drivers also migrated to the private-hire sector during the pandemic, seeking alternative avenues for income when taxi ridership plummeted. While private-hire incomes can also fluctuate, the perceived benefits of owning one's vehicle and the flexibility of app-based work have drawn many away from the traditional taxi industry. ComfortDelGro's salaried scheme can be seen as a direct attempt to win back some of these drivers and revitalise the declining taxi fleet.

Expert Perspectives: Weighing the Pros and Cons

Academics and transport economists have been keenly analysing ComfortDelGro's new venture. Professor Terence Fan from the Singapore Management University (SMU) views the scheme as a strategic move by ComfortDelGro to re-attract drivers who might have transitioned to the private-hire model due to the pandemic's impact. He suggests the company is aiming to appeal to professional drivers who desire a stable income, thereby mitigating some of the inherent risks associated with the traditional model.

Prof Fan believes ComfortDelGro is adopting a 'wait-and-see' approach, with the permanency of the model dependent on its take-up rate during the trial. He anticipates that the scheme might primarily attract drivers who are either on the verge of terminating their existing agreements or those who are currently undecided between driving private-hire vehicles and traditional taxis. For these individuals, the promise of stability and employee benefits could be a compelling factor.

Associate Professor Walter Theseira, a transport economist from the Singapore University of Social Sciences, acknowledges that the salaried taxi driver model is globally rare. However, he contends that such experiments are beneficial for Singapore's taxi industry as they provide valuable insights into which models are most effective. He thoughtfully posits that HDT's failure doesn't necessarily invalidate the model itself, suggesting that its smaller scale and lack of data compared to ComfortDelGro could have been contributing factors.

Prof Theseira further highlights that different models will inevitably appeal to different drivers. Some drivers are highly motivated by the direct correlation between their effort and fare revenue, often earning significantly more under the traditional model. Others, however, might struggle to optimise their earnings and would prefer the simplicity of driving according to the platform's directions. This could lead to a 'sorting' of drivers into different business models, which, he argues, would be healthy for the industry and beneficial for drivers as long as there is genuine freedom of choice and continued innovation.

The Driver's Voice: Is S$1,800 Enough?

While the concept of a stable income holds universal appeal, the specific terms of ComfortDelGro's offer have drawn mixed reactions, particularly regarding the proposed monthly salary of S$1,800. Six drivers interviewed about the trial expressed a common sentiment: while the idea of a fixed income was attractive, the remuneration itself was simply too low.

Chandra PR, a 63-year-old ComfortDelGro taxi driver, articulated his concerns bluntly: "Why would I risk my life to drive for eight to 10 hours a day for S$1,800?" He highlighted the inherent dangers of the job, including the increased risk of accidents from long hours and dealing with challenging passengers late at night. Comparing it to less risky professions, he asserted, "A taxi driver faces risks much higher than a cleaner or a computer guy, so I won’t take a salaried job for S$1,800. But if it was around S$4,000, I think it would be okay." Chandra currently earns between S$4,000 and S$5,000 under the traditional model, making the S$1,800 offer a significant pay cut.

Mr Raj, a 49-year-old private-hire driver, echoed this sentiment, stating that S$1,800 was insufficient for him to consider switching. "Unless you’re new to the industry or a student, unmarried with no commitments, then it may be okay. Still, you must ask yourself if S$1,800 is enough for a Singaporean to survive in this current economy. No private-hire driver will want to jump to this scheme." This highlights the high cost of living in Singapore and the practical financial realities for most working adults.

Another private-hire driver, Mr Kwan MK, 47, reiterated that driving is not an easy job and that the fixed base salary should adequately account for the associated risk factors. "Prices are going up. GST (Goods and Services Tax) has also just gone up. I'd say S$5,000 would be better. Nowadays, it’s very rare to see taxi and private-hire drivers with no family or commitments to take care of," he added, underscoring the financial responsibilities most drivers bear.

Andy Kwan, 42, a driver with Prime Taxi, provided a crucial insight into the driver's mindset: most taxi drivers are drawn to the profession primarily because of the freedom it offers. "Taxi drivers enjoy the freedom because they don’t have to answer to anyone and are in total control of their working hours." This desire for autonomy is a powerful motivator. He further illustrated the inadequacy of the S$1,800 salary by comparing it to other employment options: "If this is the case, I might as well work at McDonald’s, where I can earn S$2,000 and above and maybe get one or two meals free a day." This stark comparison underscores the perceived lack of value in the proposed salaried role given the demands of the job.

In essence, while the concept of a stable income is universally appealing, the prevailing sentiment among drivers is that the proposed compensation fails to adequately reflect the challenges, risks, and opportunity costs of the profession, particularly in a high-cost environment like Singapore.

Comparative Models: A Driver's Choice

To fully understand the implications of ComfortDelGro's new scheme, it's helpful to compare the various models available to a taxi or private-hire driver, highlighting the trade-offs involved:

The Future of Taxi Driving: A Blended Model?

The experiment by ComfortDelGro in Singapore could signal a broader trend in the global taxi industry, including the UK. As the market evolves and driver demographics shift, operators may increasingly need to diversify their offerings to attract and retain talent. The idea of drivers 'sorting' themselves into different business models, as suggested by economists, holds significant promise. This would mean a mixed economy where some drivers continue to thrive on the independence and potential for high earnings of the traditional model, while others opt for the security and benefits of a salaried position.

For such a blended model to truly succeed, however, the salaried option must offer genuinely competitive compensation. The feedback from Singaporean drivers is a clear indicator that while stability is appealing, the current remuneration falls short of what experienced drivers can earn or what is considered a living wage given the demands and risks of the job. If the salary is perceived as too low, it risks attracting only new or uncommitted drivers, failing to address the broader issue of driver shortages and unmet demand.

The success of this pilot in Singapore will undoubtedly be closely watched by taxi operators and drivers worldwide. It could pave the way for similar models in cities like London, Manchester, or Glasgow, offering a different career path for those who seek the predictability of a regular pay cheque within the taxi industry. However, the critical lesson from Singapore is clear: stability is valuable, but it must be matched with fair and attractive remuneration that acknowledges the hard work, long hours, and inherent risks faced by taxi drivers every day.

Frequently Asked Questions (FAQs)

Q: What is the main difference between traditional and salaried taxi driving?

A: In the traditional model, drivers are independent contractors who rent their vehicle and keep their earnings after covering fuel, rental, and commission costs, leading to fluctuating income but high flexibility. Salaried drivers, as per ComfortDelGro's scheme, are full-time employees receiving a fixed monthly salary and benefits, but with fixed working hours and less autonomy over their schedule.

Q: Why are taxi operators exploring new models like salaried employment?

A: Operators are seeking to attract and retain drivers, particularly those who may have transitioned to private-hire services or who desire greater financial security. These new models aim to increase driver availability, reduce customer wait times, and potentially professionalise the role further by offering employee benefits.

Q: Is S$1,800 a common or acceptable salary for taxi drivers in Singapore?

A: Based on feedback from experienced drivers in Singapore, S$1,800 is generally considered too low. Many traditional drivers report earning S$4,000 to S$5,000 monthly, and the proposed salary is also compared unfavourably to other entry-level jobs in Singapore's economy, especially considering the risks and demands of driving.

Q: What are the benefits of a stable income for a taxi driver?

A: A stable income provides financial security and predictability, making budgeting easier and reducing stress associated with fluctuating demand. Drivers gain access to employment benefits like annual leave, medical leave, and social security contributions, offering a crucial safety net and long-term financial planning opportunities.

Q: What are the drawbacks of a stable income model for taxi drivers?

A: The primary drawbacks include a loss of flexibility and autonomy over working hours, as drivers must adhere to fixed schedules and KPIs. There is also a potential for lower overall earnings compared to successful traditional drivers during peak periods, and a shift from being one's own boss to an employee with less control over their daily operations and earning potential.

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