Friday 29 Mar 2024
By
main news image

SINGAPORE (Sept 1): Autonomous self-driving vehicles have hit the streets in Singapore with the world’s first public trial run of driverless taxis in August, but taxi drivers can breathe a sigh of relief that their jobs are safe – at least for now.

“We believe an outright replacement of taxi drivers in the medium term is unlikely considering the social impact of resulting job losses,” says Daiwa Capital Markets analyst Jame Osman in a Wednesday report.

Software developer nuTonomy last week rolled out a public trial of its driverless taxi service exclusively for invited guests, confined to 4 sq km of Singapore’s “One-north” business park in the western part of the city.

The Singapore-based start-up says it is aiming to offer its self-driving taxi services commercially in Singapore by 2018.

“The implications for existing taxi operators are as yet unclear,” says Daiwa’s Osman.

The analyst believes the government could instead seek to adopt the technology as more of a complementary mode of transport.

Autonomous self-driving vehicles could ply routes within areas where traffic conditions are more controlled and travel distances are shorter, including business parks, industrial estates, university campuses, and airports.

Even then, Osman says the driverless cabs will need to overcome several challenges before it becomes commercially viable.

Speed bumps ahead for autonomous self-driving vehicles range from safety risks arising from hardware and software reliability issues, to data privacy and hacking concerns, and the lack of a regulatory and legal framework.

With these hurdles, it might take a while before driverless taxis become a norm on Singapore roads. In the meantime, Daiwa is keeping its “positive” rating on Singapore’s land transport sector.

“ComfortDelGro (CDG) remains our preferred pick over SMRT as the best managed taxi operator in Singapore, in our view, with a strong balance sheet and sustainable dividend yield of 3.5%,” Osman says.

“Unlike some in the market, we believe CDG’s Singapore taxi business should remain resilient in the near term,” he adds.

Daiwa is keeping its “buy” recommendation on ComfortDelGro with a target price of S$3.54. Meanwhile, the research house has a “hold” rating on SMRT, with a target price of S$1.67.

As at 12.21pm, ComfortDelGro is trading 0.7% higher at S$2.85 and SMRT is trading 0.3% higher at S$1.65.

      Print
      Text Size
      Share