<News First Take>: Introducing temporary fuel-related fare increase
- CDG to introduce temporary 1 Scts fare increase per tick of distance or waiting time
- Increase to help mitigate impact of rising fuel costs for drivers, underpin taxi rental fleet numbers
- Fare increase roughly in line with Grab and GoJek’s fuel-related fare increases
- Maintain BUY with TP of S$1.95
What’s New
CDG to introduce fuel-related fare increase that will be reviewed by end May-2022. A 1-cent increase per tick of distance and waiting time on the meter will result in an average increase in fares of 3.2 cents/km. This increase comes shortly after a fare hike of 2 cents in distance and waiting time fares on 1 March 2022. Separately, ComfortDelGro will also provide a one-time rental rebate of S$90, which we estimate would cost c.S$0.8m.
Our View
Temporary fare increase to underpin taxi rental fleet numbers. CDG’s move comes after Grab and GoJek implemented similar fuel related charges to support drivers. We estimate that drivers could earn an additional c.S$6.40 from the fare increase, which should help cushion the impact of higher fuel prices and is roughly in line with what Grab and GoJek are offering.
ComfortDelGro | Grab | GoJek | |
Additional fuel related charge | 32 Scts/10km on average | 50 Scts per ride | 50 Scts per ride below 10km 80 Scts per ride above 10km |
Assumed daily mileage | 200km | 10.8 trips | 10.8 trips |
Additional daily earnings | $6.40 | $5.40 | $7.02 |