Career

Is It Better To Be a Taxi Driver or a Third-Party Driver?

taxi singapore

Joanne Poh

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Becoming a “taxi uncle” has traditionally been Singaporeans’ recession proof career strategy. Why work for peanuts in a menial job where you get screamed at by crazy people, and still have to deal with a boss breathing down your neck, when you can earn significantly more, work on an own-time-own-target basis and also have your own set of wheels?

For many people, including drastically increased numbers of young cabbies in their 30s, driving a taxi is the answer.

Now, thanks to the introduction of Uber and Grab, you don’t actually need to be a taxi uncle to make a living driving people around.

Often seen as lower risk and lower commitment than being a full-fledged cabby with taxi rent to pay and a vocational licence to obtain, scores of Singaporeans in between jobs or looking for a career change are taking to the streets in their purchased or rented cars.

So, if you’re serious about driving as a career, which is better?

 

Training costs

At present, Uber and GrabCar drivers do not need to get a vocational licence, although that looks set to change next year. For now, the only costs they will have to bear involve the financing of their vehicles, whether by buying a car or renting one. Other costs, like the price of registering as a sole proprietor are rather minor.

On the other hand, taxi drivers must first bear the cost and time commitment required to get a vocational licence.

The price of the course at Singapore Taxi Academy has been reduced from $250 to $200, registration to take the test costs $10, while test fees are $5, down from $10.

The course is now 25 hours long, rather than the previous 60 hours. On top of that, drivers are also required to purchase training materials, which cost $50. All prices are also subject to 7% GST. All in all, that adds up to $283.55.

You will also need to fork out an additional $40 for your vocational licence.

 

Vehicle rental

Car rental for Uber and GrabCar drivers tends to be in the $60 to $65 range.

Uber and GrabCar drivers also have the option to purchase their own vehicle, which can actually be cheaper than renting if they buy a second hand car, intend to drive longterm and resell the car at the right time.

Taxi rental is also not cheap. The LTA website states rentals range from $75 to $105 per day. In reality, you should be prepared for prices to be on the high end of that range, with some models costing significantly more.  Upon joining a company, drivers have to pay a security deposit (at Comfort DelGro this is $1,000) and an administrative fee.

 

Petrol

While both taxi and third party drivers must fork out the cost of petrol on their own, taxi drivers benefit in this area since they can take advantage of lower diesel rates.

 

Earnings

A lot has been said about how much you can earn as an Uber or GrabCar driver. Some people say you can comfortably earn enough to cover your vehicle rental without killing yourself, while others complain that it’s a big con.

As a taxi driver, you get to keep whatever you earn so long as you pay your taxi rent. Uber drivers must pay 20% of their earnings to the company. So the price customers pay is indicative of how much drivers can earn.

Taxis are still cheaper for much of the time, while Uber and GrabCar rides tend to cost less after midnight and during peak hour. In addition, Uber and GrabCar drivers can also occasionally benefit from surge pricing.

Overall, for those who intend to ply the roads for many hours every day, it appears that taxis still offer better earning opportunities. A taxi driver at the wheel after midnight and during peak hour every day would probably earn more than an Uber or GrabCar driver who’s on the road for the same number of hours.

 

Work schedule

If you want to drive a taxi, you’d better be prepared to work hard. While you are free to set your own hours, you are subject to rules and regulations which will dictate the minimum distance you need to drive.

For instance, it is common for taxi companies to dictate that drivers hit an average of 250km per day in order to comply with LTA regulations. That’s a lot, when you consider the fact that some drivers who work for 12 hours a day can barely hit that target.

Uber and GrabCar drivers aren’t required to work a minimum number of hours or drive a minimum distance. They can even choose to keep their vehicles mostly for personal use, supplementing their income on the side with a bit of driving.

 

Other perks

Taxi companies aren’t all evil. In order to attract drivers, the various companies might dangle incentives which usually include a few rental-free days, insurance and bonuses.

At the moment, it appears that those who are looking at chauffeuring as a full-time job and are prepared to put in 12 hours a day on the road are better off driving taxis, since there’s a greater supply of customers and full-time earnings tend to be higher.

But if you have a day job and are just driving in your spare time to cover the cost of your car or earn some pocket money, the only sensible option is to become a Uber or GrabCar driver, unless you have a body double or don’t sleep.

Would you rather become a taxi or a third party driver? Share your views in the comments!

Image Credit: Kevin Utting

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Joanne Poh

In my previous life, I was a property lawyer who spent most of my time struggling to get out of bed or stuck in peak hour traffic. These days, as a freelance commercial writer, I work in bed, on the beach, in parks and at cafes, all while being really frugal. I like helping other people save money so they can stop living lives they don't like.