SINGAPORE (March 8): A commercial decision to change all taxis to yellow could save lives and potentially reduce economic losses by millions of dollars, according to a study led by researchers from the National University of Singapore (NUS).
After poring over 36 months of detailed taxi, driver, and accident data from two fleets of ComfortDelGro’s yellow and blue taxis in Singapore, researchers say they have found an explicit link between the colour of a taxi and its accident rate.
Simply put, the analysis suggests that ComfortDelGro’s yellow CityCab taxis have fewer accidents than its blue Comfort Transportation taxis.
The higher visibility of yellow makes it easier for drivers to avoid getting into accidents with yellow taxis, leading to a lower accident rate, according to NUS. Analysing the data from 4,175 yellow taxis and 12,525 blue taxis, the researchers found that yellow taxis have about 6.1 fewer accidents per 1,000 taxis per month.
What would happen if ComfortDelGro decides to change the colour of the entire fleet of taxis to yellow? The land transport operator would see 76.6 fewer accidents per month, or 917 fewer accidents per year.
“Assuming an average repair cost of S$1,000 per car and a downtime of six days, switching the colour of all taxis to yellow could generate an annual savings of S$2 million,” NUS says in a press release on Tuesday.
To be sure, that amount would make up just a fraction of ComfortDelGro’s full-year earnings.
ComfortDelGro saw earnings rise 5.0% to S$317.1 million in FY16, from S$301.9 million a year ago. Revenue fell 1.3% to S$4.06 billion in the full year ended Dec 31, 2016, compared to revenue of S$4.11 billion in FY15.
But the savings could go a long way amid the challenges ahead for ComfortDelGro.
Its taxi business, in particular, faces off with third-part taxi apps and the twin threat of private-hire car service providers Grab and Uber.
UOB Kay Hian in February cut ComfortDelGro’s 2017 net profit forecast by 7% and its 2018 net profit forecast by 10%, to reflect a “more challenging environment for taxis in Singapore”.
“While ComfortDelGro’s taxi operations are performing relatively well in Singapore with a utilisation of 98.6% seen in 2016, we believe operating conditions will deteriorate further as supply of private hire cars are increasing, leading to pressure on taxi rentals,” said lead analyst Andrew Chow in a report on Feb 13.
“Times [are] getting tougher for Singapore taxis,” Chow said.
“A commercial decision to change all taxis to yellow may save lives and potentially reduce economic losses by millions of dollars,” says Professor Ho Teck Hua, NUS Deputy President (Research & Technology), who helmed the NUS survey.
“Our results are also noteworthy to smaller taxi companies and to drivers who use their private vehicles as taxis to work for private-hire car services,” Ho adds. “We are also interested to look at private-hire vehicles and do a comparison of the accident rates of vehicles that are of different colours.”
As at 3.58pm, shares of ComfortDelGro are trading 1 Singapore cent lower at S$2.52.