On the group's brand refresh, group CEO Cheng Siak Kian says, in an April 15 interview with The Edge Singapore, that the group has "come to a point in our journey that we think that is suitable for us to look at how we want to reposition ourselves."
While the rebranding will be rolled out gradually across its global fleet, Cheng notes that the "logo is a logo", but more importantly, the new look is about "rejuvenating, reinventing ourselves" through its values, which is collaborations driving growth.
Expanding partnerhips
ComfortDelGro, which closely engages with regulators, customers, drivers, stakeholders, and shareholders, views collaboration as a core pillar of its refreshed values. The group is also looking to expand its partnerships through joint ventures, particularly in rail bids and large-scale bus operations.
See also: ComfortDelGro’s Metroline to pioneer AI-powered service control software across London operations
Collaborations are also key when working together within ComfortDelGro's various business units. "Whether you are [a] taxi business in Singapore, whether you're [a] taxi business or a taxi ride-hailing type business in the UK, there's an element that we see that collaboration actually brings them together and allows people to develop more and extract better value," says Cheng.
This spirit of collaboration also underpins ComfortDelGro's push into its next phase of growth, driven by two key pillars: sustainability and technology. While the headlines tend to focus on autonomous vehicles (AVs), including ComfortDelGro's two-year robotaxi programme with AV tech company Pony.ai, there is a lot of cutting-edge technology that is being used behind the scenes, says Cheng.
For instance, the LRT stations in Punggol and Sengkang are equipped with advanced camera systems and video analytics that monitor platform activity. Since these stations don't have platform screen doors, these systems help ensure passenger safety by preventing people from walking too close to the track through triggering alarms.
See also: ComfortDelGro launches two-year robotaxi programme in Guangzhou
Technology also plays a key role in maintenance. In its rail operations, the group relies on data to enable predictive maintenance by spotting potential issues before they occur. On the bus operations front, ComfortDelGro is using AI to make its services more reliable and improve the customer experience.
On April 15, the group announced that its UK-based company, Metroline, will use an AI-powered service control software across its London operations. An industry first, the service aims to provide more predictable driver shifts, reduce overcrowding during peak hours, and shorten wait times for passengers. The group is also looking to extend the use of AI to its bus operations in Singapore and Australia.
Growth pipeline
This focus on innovation goes hand in hand with ComfortDelGro's broader growth ambitions, particularly its push to scale internationally. Referring to the group's local and international revenue contributions, Cheng acknowledges that the "shift is already happening".
In the FY2024 ended Dec 31, 2024, ComfortDelGro's overseas revenue contributed 49.1% to the group's overall topline, up from 42.6% in FY2023, due to the three acquisitions made in 2024. "If you look at the pipeline that we have in the coming years, in the coming months, the growth pipeline is already in place," says Cheng.
The group began mobilising its Manchester contract in January, which increased its bus fleet in the UK by around 30%. The group is also in the process of mobilising its rail contract in Stockholm. The contract was awarded to ComfortDelGro's 45%-owned joint venture with the Go-Ahead Group in January. The group is also in the process of mobilising the Jurong Region Line.
"If you add those two together with Paris, the length of our tracks that we are running, [will] probably increase by 100 plus [km] to 343km next year," says Cheng, noting that the figure is about four times more than just its Singapore operations.
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The full-year contributions from the group's acquisitions from the UK and Australia in 2024 will also give shareholders a sense of what ComfortDelGro's revenue trend will be like in FY2025, Cheng adds.
Following its successful bid to operate four bus franchises in Greater Manchester, the group sees strong growth potential in the UK's public transport sector. New opportunities are emerging from the privatisation of previously government-run contracts, as well as from the consolidation of services by private operators. Cheng notes that similar agreements are expected in cities such as Liverpool, Yorkshire and Birmingham.
On the rail front, the group has announced its bid for the Sydney Metro West tender in Australia, in partnership with UGL Group and Hyundai Rotem. "There'll be others in the coming months, whether it's Melbourne [or] Copenhagen, all these are new contracts that we are bidding for," adds Cheng.
Driving through uncertainty
Amid current macroeconomic uncertainty, Cheng believes it's too early to assess the potential impact of US tariffs or broader geopolitical tensions. "On the whole, we suspect the impact is not so much on the public transport side, because a lot of the public transport are very long-term contracts and they are domestic facing, so the tariffs are not likely to impact that," says Cheng.
In an April 15 report, UOB Kay Hian analysts Llelleythan Tan and Heidi Mo noted that ComfortDelGro will remain "relatively unaffected" by the tariffs and the escalating tensions between the US and China due to the "defensive characteristics and demand inelasticity of the transport sector".
"Approximately 50% of ComfortDelGro's annual revenue and 60% of its annual operating profit are derived from domestic operations, implying little impact on both its top and bottom lines," Tan and Mo wrote. "Furthermore, close to 85% to 90% of ComfortDelGro's operating costs are attributed to costs such as staff and insurance costs, which are unaffected by the tariffs. We also understand that ComfortDelGro sources its buses from Europe and China, with no exposure to the US."
While the demand for rides may be affected by sentiment, Cheng is less worried about any immediate impact. Instead, the group is keenly looking for factors such as the impact of foreign exchange. "We are looking at potential changes in input costs. So far, there's a little bit of upside to the fuel costs. But all these are quite transient, so it's still a bit early for us to say," he says.
For now, oil prices remain supportive of ComfortDelGro's cost structure, with the group hedging its fuel needs. However, even with the group locking in some of the lower prices now, these will be reflected in the third and fourth quarters when the group actually uses them. "So it's a little early to say at this point in time. But US$60 ($78) fuel is clearly going to be beneficial for transportation in general. But the question is, is that going to be sustained"?
New competition in the taxi business
Meanwhile, ComfortDelGro faces new challenges as Grab prepares to become Singapore's sixth taxi operator, having been awarded a street-hail operator licence in early April. This marks a fresh competitive shift in a sector the group has long dominated.
With a fleet of over 8,400 taxis, ComfortDelGro remains the largest operator in Singapore's point-to-point transport sector. However, the rise of Grab, a major player in the private-hire car space, highlights the growing convergence between traditional taxi services and app-based ride-hailing platforms.
While competition has long been part of the landscape, Cheng notes that the real challenge now lies in rising costs, particularly the surge in certificate of entitlement (COE) premiums, which he describes as "one big barrier" for operators.
Ultimately, taxis offer a higher quality of service throughout the day, with longer and more consistent operating hours compared to private hire vehicles, he says. However, to sustain this level of service, the industry needs support - whether through preferential cost structures or more stable fares - to attract and retain drivers.
In light of the global driver shortage, Cheng sees the group's work with AVs as a crucial solution to supplement the limited driver pool, particularly in major Chinese cities and key markets such as Singapore, Australia, and potentially the UK.
Through its programme with Pony.ai, the group is looking to address safety issues and factors such as operating a fleet of AVs eventually at scale. However, the group's drivers need not worry about job security, as there is "simply not enough supply". In its responses to shareholders' questions, the group noted that Singapore's taxi population decreased by around 29% from 18,542 to 13,117 between December 2019 and December 2024.
"When you have gentrification of the population in general, drivers who're willing to drive very long or fixed hours to ensure consistency of supply throughout the day, that is increasingly under pressure. That's what we're seeing, and it's the same probably throughout all the markets we're operating in," he adds.
'Doing the right thing'
Following allegations of misconduct at A2B Australia, Cheng asserts that the country's regulators and clients recognise that the group is "doing the right thing." The controversy surfaced on Feb 15, when two of Australia's biggest newspapers, The Sydney Morning Herald and The Age, accused A2B of scams and fake taxi transactions. The allegations, uncovered in leaked confidential files, were also reported by the Australian current affairs programme 60 Minutes, which revealed that senior staff failed to prevent the fraud.
He adds: "In April, when we took over the business, we actually took the step when we locked down the meter in the point of sale (POS) machine. And that is something that the previous owner didn't manage to do, but we made a decision to lock it down."
However, this decision came at a cost, as it drove away some of the other taxi companies that had also been using the group's CabCharge POS machine. Due to Australia's anti-competitive measures, A2B was restricted from applying the lockdown feature to its entire fleet, thereby reducing the potential for fraud across the industry, Cheng adds.
"The 60 Minutes [report] basically reviewed some of these deep-seated issues in the industry. We are working actively with all the regulators through the different states to ensure that we can just start pushing out better regulations to allow this to happen, and that eventually will help to improve the quality of service and reduce fraud across the whole industry," he adds.
"So in some sense, I think, while it is unfortunate that 60 Minutes will paint [this story] in a particular manner, overall, I think the outcome is actually better. Because it does start to raise the standard and quality, and we'll continue to do more... so people will gain back confidence," says Cheng.
