No relief in sight – what's driving pricier taxi and ride-hailing fares

Back in 2022, Woodlands resident Intan McCallum estimated that a ride-hailing trip into town would cost about S$25 (US$19). These days, however, she pays about S$30 to S$40 for a similar journey.

While living in Woodlands means such trips have "always been pricey", the 20-year-old observed that fares have been increasing sharply, especially in the past year.

Ms McCallum, who is waiting to enter university, said that using ride-hailing services regularly would be unfeasible as it would eat into her weekly allowance.

"I've also had to leave functions early to catch the last train, or in some cases, wait for the first train," she added.

Yishun resident Kelvin Ong made a similar observation, saying that in the last two years, fares have increased from about S$24 to S$28 from his home to his workplace in Bugis during off-peak hours. But he is sanguine about it.

"Factoring against issues in the Middle East due to oil prices and all that, a price increase is reasonable," said the 29-year-old, who works in a marketing firm.

Mr Ong added that private-hire platforms, having already gained market share, are likely facing less pressure to keep fares low through promotions and discounts in recent years than they did in their early years here.

Indeed, the latest figures from the Singapore Consumer Price Index tabulated by the Singapore Department of Statistics (SingStat) show that the prices of point-to-point (P2P) transport services were 12.3 per cent higher in August 2026 than in August 2025.

SingStat told CNA that the increase was mainly due to higher flat fares, rather than the level of metered taxi fares.

During the same period, the price of the overall basket of consumer goods and services used by SingStat to measure inflation increased by 2.3 per cent.

Transport analysts said the affordability of P2P services bears close attention as the sector is an important complement to the public transport network, providing transport options to areas not well-served by public transport, as well as outside of public transport operation hours. 

But as the pricing of P2P services is left to the open market, the public should not expect the government to step in with subsidies should fares continue to surge, said transport economist Walter Theseira from the Singapore University of Social Sciences (SUSS). 

"There is very little case for why subsidies to the P2P (sector) makes sense compared to spending the money instead on public transport," he said.

Several drivers who spoke to CNA said the increased fares aren't necessarily leading to higher incomes for them. Although data from the Ministry of Manpower (MOM) shows that the incomes of drivers have risen or plateaued each year since the COVID-19 pandemic up to 2025, several of them said rising costs are hitting them harder this year.

A taxi driver, who wanted to be known only as Mr See, said that while P2P fares may be rising, much of the additional takings go towards covering increasing fuel costs rather than into his pocket.

"There's nothing we can do, there's a war going on in the Middle East, the fuel prices have increased significantly," said the 61-year-old in Mandarin.

Ms Yeo Wan Ling, adviser to the National Taxi Association (NTA) and the National Private Hire Vehicles Association (NPHVA), underscored this apparent paradox: that higher fares paid by passengers do not necessarily translate into correspondingly higher take-home earnings for drivers.

"What matters to drivers is not the headline fare, but what remains after rental or vehicle financing costs, fuel or charging costs, platform commissions and fees, insurance and other operating expenses," said Ms Yeo, who is also NTUC assistant secretary-general.

"These costs have risen over the years and continue to take a significant share of drivers' gross earnings."

Drivers noted in particular that aside from fuel costs, platform commissions and fees have risen quite substantially in recent years.

Transport analysts said that these platform commissions and fees can fund innovations and improvements, such as better matching drivers with passengers, though the benefits have been mixed, or not made transparent.

There were hopes that ride-hailing platform companies would "revolutionise" the P2P sector and offer lower fares while being profitable, but the efficiency gains have turned out to be "not as apparent", said Associate Professor Theseira.

"There are efficiency improvements such as more efficiently utilised fleets and less waiting time, but not so large that the fares are permanently lower," he said.

What remains is a situation where few are satisfied. Commuters say they are pained by higher fares and drivers are vexed by stagnating incomes, even as platforms pledge to balance the interests of both sides.

WHAT'S DRIVING UP P2P FARES?

P2P transport prices spiked over the past year, after already rising steadily for the past five years.

According to SingStat data, the price of P2P transport services had increased by 47.1 per cent as of August this year, compared to the median price in 2021.

The overall basket of consumer goods and services increased by 18 per cent over the same period.

Responding to CNA's queries, SingStat said that the P2P figures were calculated using fares from major ride-hailing and taxi operators, and include all charges paid, such as platform fees, booking fees and surcharges.

Assoc Prof Theseira said that the significant increase in the prices of P2P services in the past five years is not surprising.

Post-COVID, there was a surge in demand for P2P services but a shortage of drivers, many of whom had moved on to other jobs during the pandemic.

Prices were then driven up by the Russia-Ukraine war, which started in 2022 and disrupted energy supply chains.

"There was a general sense that the corner had been turned in the last year or so because basically a lot of these issues had been worked out through the system more or less, and so inflation had come down quite sharply," said Assoc Prof Theseira.

But just as prices began to stabilise, tensions flared across the Middle East with the outbreak of the Iran war earlier this year, which "started a new round of energy cost inflation", he added.

Assoc Prof Theseira said the P2P sector is seeing a higher rise in prices than general consumer goods because all of its major cost components are becoming much more expensive than other categories of goods.

Alongside the rising cost of fuel, Certificate of Entitlement (COE) prices have also risen sharply over the last five years, which would lead to an increase in vehicle costs.

In tandem, the price of motor cars had increased by 56.8 per cent in August 2026 compared to 2021.

The sharp rise in P2P fares should not be mistaken for public dissatisfaction with other forms of public transport, such as trains and buses, experts said.

After all, the user base for P2P services has always existed, even before ride-hailing entered the fray, said veteran transport engineering consultant Gopinath Menon.

"For many who don't own a car or don't want to because of the high cost of ownership and use, and who don't relish the alternative of public transport (which is) efficient and affordable, but not door-to-door, the taxi has been a popular choice," said Mr Menon, a former board member on the Public Transport Council.

By offering more efficient rides and appealing to tech-savvy commuters, ride-hailing platforms have eaten more into taxis' market share than into public transport's part of the market.

"Private-hire vehicles are chosen more for convenience than for the perceived inadequacy of public transport," said Mr Menon.

The more structural reason for the sharp rise in fares is that there is a limit to what can be optimised in the P2P business model, said Assoc Prof Theseira.

In other industries, supply chain improvements or technological advancements can significantly reduce costs, he noted. For instance, the proliferation of Chinese e-commerce platforms has led to cheaper goods from China being shipped to Singapore.

Space for such innovations in the P2P sector is limited, as it will still require a local driver and a vehicle to ferry passengers around.

"The point is that there are certain structural changes to the economy that drive efficiencies and reduction in costs in some sectors. However, when you look at the P2P sector, there is no such thing," he said.

The nominal incomes of Singaporeans have also risen, which means that drivers' wages have had to keep pace, Assoc Prof Theseira added.

"It's a good thing that Singaporean wages go up, but when Singaporean wages go up, it is inevitable that P2P (prices) go up because it is the driver's labour which is a very large part of the cost," he said.

To that end, ride-hailing companies have told CNA that fares and adjustments to platform fees are set to strike a balance between ensuring rides are competitively priced, and ensuring drivers take home sustainable earnings.

WHY DO DRIVERS SAY INCOMES ARE NOT INCREASING?

MOM data up to 2025 shows that attempts to boost drivers' incomes were working.

The monthly incomes of private-hire drivers had hit a median of S$2,500 in 2019, before they fell to S$1,700 in 2020 during the COVID-19 pandemic. They then rose to S$2,500 again and remained at that level from 2022 to 2024, before hitting a new high of S$3,000 in 2025.

Median monthly incomes for taxi drivers had likewise dipped from S$1,500 in 2019 to S$1,000 in 2020, but rose again to S$1,500 in 2022 and 2023, before rising to S$1,800 in 2024 and S$1,982 in 2025. 

But drivers say things have changed in the past year, especially given the unprecedented increase in fuel prices.

For full-time taxi and private-hire vehicle driver Yeo Hooi Chye, rising fuel and vehicle costs have eaten into whatever increased earnings he may have earned, keeping his income stagnant.

He said that daily rental costs have remained at about S$110 for the past year, while petrol now costs S$50 for a day of driving, up from about S$32 at the same time last year.

"To get back this S$160, you have to drive four or five hours," said the 64-year-old. "Only after that do we make a profit."

Ms Yeo, the adviser to NPHVA and NTA, said that operating costs remain one of the biggest pressures on drivers' earnings.

Fuel has seen the sharpest increase, with petrol prices at major retailers having risen close to 20 per cent since March, to about S$3.45 a litre in September, while diesel has again gone above S$4 a litre.

"Vehicle, rental, financing, insurance and maintenance costs have also gone up," she said.

"Drivers start each working day needing to cover these costs, and only after that do they begin earning income for themselves."

The government in April announced a S$200 payout to eligible taxi drivers and platform workers to cushion the impact of sharp fuel price increases. 

Professor Lawrence Loh, director of the Centre for Governance and Sustainability at the National University of Singapore (NUS) Business School, said that the increase in fares can also go back to the platforms in the form of increased platform fees and commissions.

Both Grab and ComfortDelGro raised platform fees this year, with Gojek and Ryde following suit in February.

Prof Loh said that historically, ride-hailing platforms have been operating with costs higher than their revenue in a bid to gain market share, and so have been "incrementally" trying to break even.

"Of course, the drivers do get some increase (in wages), but my sense is some of these increases could barely even cover the increase in the cost of living," he said.

A private-hire driver, who wanted to be known only as Mr Chiu, said that he noticed platform fees and commissions have increased as well.

Based on his conversations with passengers, Mr Chiu said that fees and commissions on some platforms were about S$3 to S$4 about two years ago, but now they have increased to at least S$5 to S$7, with pricier trips seeing up to S$15 in commissions.

Coupled with fuel prices surging, the 60-year-old said that the past year has been financially challenging for him, even though he has been driving the same number of hours.

WHERE ARE THE PLATFORM FEES AND COMMISSIONS GOING?

Ride-hailing platforms said that they are using platform fees and commissions to improve their technology, provide fuel rebates to drivers, and support drivers’ Central Provident Fund (CPF) contributions.

A platform fee is a charge paid by the passenger, usually added on top of the ride fare, while a commission is a charge paid by the driver to the platform, usually deducted as a percentage of the fare the driver earns.

A Grab spokesperson said that its adjustments to fares reflect broader industry-wide factors, including rising fuel costs, as well as provisions under the Platform Workers Act that safeguards drivers' "long-term earnings and security". 

Passed in 2024, the Act requires platforms to contribute to eligible drivers' CPF savings and provide work injury compensation coverage.

The spokesperson added that Grab remains "deeply committed to balancing fare sustainability for drivers with affordability for riders". 

"To support our driver-partners, we continuously optimise dispatch efficiency to reduce wait times between jobs and enhance productivity, while leveraging fuel discounts, electric vehicle charging rebates, and fleet partnerships to lower their daily running costs," the spokesperson said.

Grab said it has also sought to offset higher costs for commuters through cheaper options such as Group Rides and GrabHitch, which it said can reduce fares by up to 40 per cent, as well as through promotions and loyalty rewards.

A Tada spokesperson said that it had made two increases to its rider platform fee, with the most recent increase in 2025.

The spokesperson said that adjusting the platform fee was necessary to keep its zero-commission model commercially sustainable while "continuing to support drivers and provide competitively priced rides".

It also uses these fees to make contributions towards drivers' CPF and insurance coverage under the Platform Workers Act.

Tada had also revised its fuel support fee in April this year to help drivers manage rising operating costs.

"Ultimately, our goal is to strike a balance between keeping rides affordable for riders and ensuring that drivers are fairly compensated and supported," said the spokesperson.

A Ryde spokesperson said that it "periodically reviews its platform fees to ensure that we can continue operating a reliable and sustainable platform".

"Platform fees support areas including technology infrastructure, app development, safety and security, customer support, regulatory and compliance requirements, as well as continued improvements to the experience for both passengers and driver-partners," the spokesperson said.

Ryde added that it is committed to collecting no commissions through the end of 2027.

"We recognise the broader increase in point-to-point transport costs and remain focused on balancing affordability for passengers with sustainable earnings for driver-partners," it added.

The spokesperson added that the approach is not "simply to pass every increase in operating costs on to passengers".

"We also look at how we can improve driver economics and marketplace efficiency through our commission structure, incentives, better matching and routing."

A Gojek spokesperson said the platform's fares "reflect the balance between keeping rides affordable for passengers and ensuring a sustainable livelihood for driver-partners amid rising operating costs".

"We continue to offer promotions for passengers and support programmes for driver-partners, and remain committed to keeping rides accessible."

CNA asked the ride-hailing platforms about how their average fares have increased over the past five years, but they declined to provide such figures, with some citing commercial sensitivities.

CNA also reached out to taxi firms ComfortDelGro, Prime Taxi, Strides Premier and Trans-Cab to ask what measures they have taken to keep rides affordable for passengers while ensuring that driving remains financially viable. None had officially responded by publication time.

Ms Yeo acknowledged that digital platforms have brought benefits to the P2P sector, such as more efficient matching of drivers and passengers. This can help drivers reduce waiting times and find more trips, she said.

But what is lacking today is transparency: Drivers need to understand clearly what is being deducted from each trip, while commuters should also have clarity about what they are paying for, she said.

"This is why NTA and NPHVA have consistently called for greater transparency in how fares, commissions, platform charges and other fees are determined and shared," she added.

"Ultimately, when fares increase, there should be transparency over where that additional fare dollar goes. Drivers should be able to see whether they are sharing in the upside."

On balance, it is hard to say if the sharp increase in P2P fares is justified, said Dr Terence Fan, assistant professor of strategy and entrepreneurship at Singapore Management University, especially as the complete formula for how ride-hailing platforms price their services is not made public.  

The transport economist said that under the taxi system, there is a very clear distinction between peak and non-peak timings and the associated percentage increase in fares. The same cannot be said for ride-hailing.

Echoing Ms Yeo's point, Dr Fan said it would also help if there were a more transparent breakdown of how companies spend their platform fees and commissions, and if it has improved passenger experience.

"In the taxi domain, which is regulated, taxi companies have to track and report the number or the per cent of the calls that they are able to answer (within a certain time)," he said.

Dr Fan added that there could be more transparency on service standards for ride-matching success rates and waiting times for ride-hailing, as there already is for taxis.

The Land Transport Authority (LTA) publishes information on ride-matching indicators, such as call answer rates and passenger waiting times for taxi bookings on ComfortDelGro.

As of July 2026, ComfortDelGro passed all its quality of service standards, such as ensuring that calls are answered by the taxi dispatch system within 30 seconds at least 70 per cent of the time, and that waiting times for taxis are under 10 minutes at least 65 per cent of the time. 

LTA does not publicly release industry-wide ride-matching success rates or average waiting times for app-based ride-hailing services, while comparable Singapore-specific figures are not routinely disclosed by the major platforms.

"With the platforms, there is no equivalent service status … we don't have an equivalent index to capture how unsatisfied people are," said Dr Fan.

IS MORE COMPETITION THE ANSWER?

It might be tempting to think that more competition would help drive fares down across the board, but Associate Professor Raymond Ong from NUS said that there is already sufficient competition in the P2P sector, with customers able to choose between various taxi and ride-hailing platform options. 

"(Commuters) definitely compare across different platforms, and there is always competition about vehicle availability, waiting time, and the booking experience," said Assoc Prof Ong, who is deputy head of research and enterprise at the NUS Department of Civil and Environmental Engineering.

He added that there is also some degree of service differentiation, with some firms giving commuters options for bigger or premium vehicles.

Furthermore, more competition is not necessarily healthy for the P2P sector, said Assoc Prof Theseira from SUSS.

"Having more platforms is not going to do anything about price components like wages, energy and rental."

This could also drive prices upwards, as platforms need to attract drivers with higher wages, he added.

Having more ride-hailing and taxi firms can make matching passengers with drivers less efficient, as each operator would have a smaller pool of drivers and passengers, he noted.

"Competition is useful, but the sweet spot for this industry is somewhere between a tiny number and a lot of players," he said.  

The relationship between fares and competition (or the lack of it) came under the spotlight in the aftermath of the Grab-Uber merger almost a decade ago, leading regulators to step in.

Uber sold its Southeast Asian business to Grab in 2018, resulting in the Competition and Consumer Commission of Singapore (CCS) imposing a total of more than S$13 million in financial penalties on the two ride-hailing firms, after ruling that the deal was "anti-competitive".

CCS also imposed conditions on Grab, such as maintaining its pre-merger pricing algorithm and driver commission rates, preventing Grab from changing certain prices and pricing policies without regulatory approval, and removing exclusive arrangements that prevented drivers from using competing platforms.

Responding to CNA's queries, CCS said that "the regulatory landscape has evolved since the Grab-Uber merger in 2018".

It added that LTA had introduced the Point-to-Point Transport Regulatory Framework, which took effect in late 2020, after which CCS lifted its safeguards imposed on Grab.

The new regulatory framework included safeguards such as ensuring drivers could work across multiple ride-hailing platforms, and that operators clearly communicated fares and additional charges to passengers.

"CCS continues to monitor competition developments across markets, including the P2P transport sector, and will take enforcement action where warranted within our regulatory ambit," it told CNA.

Looking abroad, there are examples of ride-hailing companies that have taken service standards up another level to attract more customers.

The South China Morning Post reported that increased competition in China has led to ride-hailing firms offering passengers extra services such as massage chairs, karaoke entertainment, snacks and haircuts.

Assoc Prof Ong from NUS said that in Singapore, the focus is still based on "fundamentals of P2P", which is safety, reliability, convenience and service standards. 

"What really matters for Singaporeans is to be able to secure a ride within a reasonable waiting time, and then travel in a safe and comfortable vehicle, having a professional driver, and reaching the destination safely," he said. 

Agreeing, Ms McCallum, the Woodlands resident, said that rides arriving more quickly would make the biggest difference to her commuting experience, especially with prices getting higher.

"Small gestures like providing charging cables or water, asking us if we are comfortable with the air conditioning, and allowing us to connect our own music would also make the ride more enjoyable or just more personal," she added.

Ms McCallum added that surge pricing of fares during peak hours has been a bugbear, where she has seen fares from central areas back to Woodlands go as high as S$70.

"I think having a price cap would be great … It's just not justifiable to pay S$70 to get home after a long day of work," she said.

But while it may hurt to see such an astronomical figure for a ride home, surge pricing helps allocate trips to those who most urgently need them, said Assoc Prof Theseira.

Before surge pricing existed, taxi operators have been adopting surcharges for peak hours and late nights, but these are "blunt" measures that propped up fares by a set percentage of the original fare, or a set amount, he noted.

"The old taxi surcharge system is not really that effective at times at balancing supply and demand," he said. "Surge pricing is actually far more efficient than the old system."

Surge pricing is thus an efficient means of ensuring that customers who most urgently need rides will get them, while others are encouraged to search for alternatives, he said.

"Many commuters don't fully understand why (P2P firms) are charging so much, but if they didn't charge this much, you won't get a vehicle to pick you up."

THE ROAD AHEAD

Short-term fluctuations notwithstanding, long-term P2P fares are likely to continue increasing in line with nominal wage growth, Assoc Prof Theseira said.

In fact, it would be bad for Singapore's economy if P2P fares see a decrease over time, he said.

"That's because a decline in P2P prices almost certainly means that the economy and travel are tanking, and Singaporeans are out of jobs and seeking to earn income by flooding the market as P2P drivers."

He added that with nominal wages increasing, it is also not realistic to expect drivers' wages to keep stagnating or fall behind.

"The reason why their wages must go up, is because there are plenty of other jobs which have changed, and if their wages don't change, then (there will be) no supply of P2P drivers."

For example, the recent increase in bus drivers' starting pay could serve as a "more attractive alternative" for those who want to be professional drivers, said Assoc Prof Theseira.

"Labour is a major cost, and labour cost is not driven by the P2P job, it is driven by alternatives," he added.

Neither should the government be expected to step in to provide subsidies to the P2P sector. 

In addition to the argument that taxpayers' funds would be better used to improve the public transport system, sweeping subsidies to artificially lower the prices of P2P services would likely be an unpopular move. 

Assoc Prof Theseira said: "For example, how many middle class taxpayers are going to be happy if they see that, for example, youths are using subsidised taxis to go home after partying late at night?"

From the public policy perspective, the solution to reducing fares would be to provide more last-mile transport options, such as by having shuttle buses operate last-mile trips from public transport nodes to places like hospitals. 

Ms Yeo said that affordability for commuters and sustainable earnings for drivers should not be treated as competing objectives.

"We need to look at the whole economics of the trip: what the passenger pays, what the platform or operator receives, what it costs the driver to provide the service, and what the driver ultimately takes home," she said. 

She said it is important to keep drivers' operating costs manageable, ensuring that commissions and charges are reasonable, and making sure drivers have sufficient trip opportunities to earn a sustainable income.

"Singapore needs enough drivers who feel that driving is worth their time and effort. If drivers cannot earn a sustainable living, they will eventually leave the sector, and that will ultimately affect availability and affordability for commuters too," she said. 

NUS' Assoc Prof Ong similarly expects fares to rise over time, but said platforms can help contain costs by improving their technology to match commuters with drivers more efficiently, reducing the time drivers spend searching for passengers.

Striking a balance between demand and supply will be no less crucial in the coming years.

"If you have supply but no demand, then of course things will be expensive because the fleet costs are there," he said.

"But if you have a demand that's high but not enough supply, then the cost is there because there are always people who are willing to pay more," he said. "To find that sweet spot is actually a very big challenge."