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Here’s why ComforDelGro's taxi business is unfazed by Grab, Uber
Taxi revenue rose at a steady 2.8%.
Even with the popularity of ride-hailing applications like Grab and Uber in the city-state and the weakening of taxi industry, ComfortDelGro's taxi business remained unfazed and continues to register steady number for the company.
Even though its bus segment is its primary bread and butter, its taxi segment still contributes a huge chunk, comprising one-third of the company's revenue.
For the past quarter ending in June, its taxi business posed a 2.8% increase in total revenue to $340.2 million. This is compared to $330.8 million for the same period last year.
Looking at the operating profit from each of the segments, its bus business contributed only an inch higher then its taxi business.
For the said quarter, its taxi business contributed 37.9% of its operating profit at $46.6 million, 5.7% higher than the profit it has a year ago.
"Despite on-going concerns over competitive pressures from Uber and Grab, CD’s taxi business continues to register steady revenue and operating profit growth," RHB analyst Shekhar Jaiswal said.
Meanwhile, the group indicated that the hire-out rate for Singapore taxi business remains close to 100%.
"While it continues to face difficulties in adding new drivers to domestic taxi operations, management said it will be able to maintain the elevated hire-out rates without material increases in taxi drivers’ benefits," the analyst said.
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