Earlier this week, ComfortDelGro, Singapore’s largest taxi operator, announced that it will be introducing a pilot scheme allowing taxi drivers to earn a fixed monthly salary of S$1,800, along with perks like annual leave, performance bonus, medical leave, and employee contributions to their Central Provident Fund accounts.
The initiative, which includes fixed driving hours for more consistent earnings, aims to attract up to 50 drivers by the end of March with the hope of also enhancing service availability and reducing passenger wait times.
Traditionally, taxi operators generate revenue by renting out the taxis to drivers. Taxi drivers pay rent to the operators (about $60 to $130 depending on the type of taxi) and retain most or all of the income from their fares. The system also gives drivers the flexibility to choose their working hours, with their earnings directly tied to how much they choose to work. Under this system, taxi drivers have been operating as self-employed individuals
The Downside Of Self-Employment As A Taxi Driver
The main drawback of being a self-employed taxi driver is the lack of typical employment benefits such as annual and medical leave, CPF contributions and fixed working days. For instance, it’s common for taxi drivers to work on weekends and public holidays, forgoing family time, to capitalise on higher earnings during these peak periods.
Another significant issue for self-employed drivers is the uncertainty of their income. Their daily earnings depend entirely on the number of rides they complete. Factors beyond their control, like illness or external events that reduce passenger demand (such as the COVID-19 pandemic), can significantly decrease their income. This lack of income stability is a key challenge for taxi drivers who operate on a self-employment basis.
Pros & Cons Of Full-Time Employment
As full-time salaried employees, taxi drivers will gain access to several benefits currently unavailable to them. These benefits include annual and medical leave, set working hours, and contributions to their CPF accounts. Additionally, they will receive a basic salary and may earn performance bonuses upon meeting certain targets. ComfortDelGro has also indicated that it will cover fuel costs.
However, this arrangement comes with certain trade-offs. Similar to many full-time positions, having fixed working hours means that drivers are required to adhere to their assigned schedules. Like other regular employees, they cannot simply choose not to work unless there is a legitimate reason. Drivers will have the option to work either nine-hour shifts for five days a week or eleven-hour shifts for four days a week.
In essence, they will sacrifice some of their work-hour flexibility in exchange for greater job stability and security.
Read Also: How Much Self-Employed Persons Need To Contribute To MediSave
The rise of ride-hailing apps in Singapore has disrupted the traditional taxi industry, a phenomenon not unique to Singapore but also worldwide.
In response to this disruption, ComfortDelGro’s move to offer full-time employment opportunities represents a strategic shift. This option would appeal to those who are interested in joining as a driver but are hesitant to embrace the uncertainties of self-employment. A full-time position with ComfortDelGro provides these drivers with the stability of a regular income and the security of employment benefits, which are not typically available to other private-hire drivers.
By providing this alternative, ComfortDelGro is hoping to position itself to attract and retain drivers in a highly competitive market.
Read Also: Guide On How To File Your Income Tax As A Private Hire Car (PHC) Driver Or Taxi Driver In Singapore
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