SINGAPORE (June 30): GrabTaxi launched GrabCar, a private transport service similar to Uber over the weekend.

The rising trend of private transport services could pressurise taxi rentals for traditional players and the market could be under-estimating the threat, writes analyst Derrick Heng in a June 29 report.

GrabCar is being aggressively marketed, giving out free rides over the weekend.

According to media reports, GrabTaxi aims to have a fleet of 600 cars by end-205 and 2,000 in the longer term.

“There are currently 20,838 rental cars in the market that new players could potentially harness. This is a credible fleet size vs the 28,792 taxis currently on the road. We believe ComfortDelGro could be most affected by the competition as its taxi business accounts for 31% of its sales and 34% of earnings before interest and tax,” writes Heng.

Maybank Kim Heng has a “sell” call on ComfortDelGro with a target price of $2.70.

SMRT will be less affected as its taxi business is not a material share price driver for its stock.

Maybank Kim Eng has a “hold” call on SMRT with a target price of $1.57.

The brokerage house has a “neutral” call on the transport sector for lack of catalysts.

ComfortDelGro and SMRT are trading flat at $3.11 and $1.54 respectively.