The future looks tough for taxi drivers, but they can earn more by adding value to their services, said Prime Minister Lee Hsien Loong yesterday at the Singapore Tripartism Forum.

They could double as tourist guides or ferry medical tourists, he suggested.

Cabbies have to get creative in making money, for one reason: The Government does not intend to limit the number of cabbies by making it tough to get taxi licences, like what some countries do.

Mr Lee was responding to a question from Comfort Taxi Operators' Association general secretary Phua Tie Mok, who expressed concern over cabbies' shrinking earnings.

Mr Phua feared their takings would be further affected by the imminent goods and services tax (GST) hike, the upcoming MRT Circle Line and cheaper cars.

But Mr Lee reassured cabbies, saying: "There will always be a role for cabbies... because even with MRT, even with buses, there will be people who will want a taxi ride because it's more convenient.

"There is a future for taxi drivers in Singapore, but it will not be very easy."

Other big cities had taxi services that did quite well, but often at higher fares than in Singapore, he added.

Mr Lee said the Government had been watching the earnings of cabbies.

He knows it has been tough in recent years as fuel costs have risen sharply and taxi companies have been reluctant to raise fares, he said. But fuel costs have fallen slightly recently, which he hopes has helped.

Comfort Taxi Operators' Association president Nah Tua Bah also asked Mr Lee whether cabbies could get help to pay their Medisave contributions, given that their costs are subject to GST but not their fares.

Taxi drivers have to pay some $600 or $700 into their Medisave each year before they can renew their licences, said Mr Nah.

Mr Lee said this could not be done, as taxi drivers were exempt from the GST scheme, just like shopkeepers and small companies.

"Otherwise the burden on them, the bookkeeping and the extra cost is too high," he said.

He believed cab companies would, in fixing the fares, take into account "all your costs... including the GST".

"So implicitly, you have recovered the cost of the GST."

This article first appeared in The Straits Times on 25 Jan 2007