|Returned COMFORT taxis|
Prolonged competition from private car operators has made COMFORT, the biggest taxi company in Singapore to report a massive downfall in revenue. Its net profit for the second quarter ended June 30th fell 6.8% to S$79.4 million, a fall of S$5.4 million in 3 months.
She has never had such a hefty revenue decline in her decades of taxi operation and with the competitive "tsunami" not receding in the foreseeable future, investors confidence and funding are now restrained and this would surely lead to a cessation of taxi operations eventually unless a viable restructuring solution is found.
Compounding her revenue misery, COMFORT has a new enemy in Grab, a regional ride-hailing rival that's No 1 choice in Singapore. On Sunday night (Sept 3), Grab "attacked" COMFORT by alluring her taxi drivers with 40 percent rental discount if they switch camp to join rival taxi operators like SMRT, TransCab, Premier and Prime. To a taxi driver, this attractive rental discount would mean a saving of almost $1,500 per month. The discounts are higher if the cabbies take on a private-hire car through GrabRental. This would save them $1,688 monthly or about $60 rental a day. No wonder, COMFORT's share fell for a second straight day after this "attack".
Undoubtedly, COMFORT is now in deep water. She has been complacent for decades with deadwood management and operating with authoritarian auto-mood. Now, having caught napping at the wheel. she belatedly tried to shift gear and started talk with Uber about a partnership. This probably prompted Grab's recent attack. But I doubt anything positive would emerge from discussions between Uber and COMFORT.
Never did COMFORT anticipate that a day like this will come and is now licking her wounds.
Comeuppance time! my friends. Nothing makes me happier than this happening in COMFORT. I'm a strong believer in KARMA!
Remember the day when "monopolistic" COMFORT was a big brother and "governed" the taxi trade with rules that others had to follow. Remember how their disciplinary staff mercilessly sack loyal drivers without hesitation and investigation but merely based on a phone call. These dirt bags and dead woods in COMFORT will soon taste their own medicine.
Today, COMFORT in-house parking lots are insufficient to accommodate the colossal number of taxis returned by their drivers, so much so that she had to rent third party parking lots,
From reported estimates, nett rental income from two running taxis is needed to cover the costs of one superfluous cab in the shelter. With 5 percent of excessive returned-taxis, COMFORT is suffering a 800 x $100 = $80,000/day ($2.4 millions/month) of loss of income, taxes and depreciation. Therefore, it's not a question of IF but WHEN will COMFORT close shop.
Two years ago, I predicted that COMFORT would face bankruptcy (Link). Today the reality of COMFORT demise is on the horizon like Temasek's sale of N.O.L. (Neptune Orient Lines) to France's CMA CGM.
It’s disastrous when you have stupid people in charge of companies.
Please allow me to quote the following passages from my most admired blogger "Loh and Behold"
Taxi drivers used to be a spoilt lot, cherry picking passengers and disappearing whenever they are needed only to emerge when surcharges kick in.
There are at least 42,800 private-hire cars on Singapore roads today and only 26,000 taxis.
Flexible working hours and the perks of having a car are what attracted many to become private-hire car drivers.
Those still hanging on to the taxis are begging the LTA to let them double up as delivery drivers.
Today Uber and Grab are eating their lunch.
No longer finding it viable to continue as taxi drivers, many are returning their taxis.
You may be the cock of the walk, but a day will come when you’ll end up as a feather duster.