COMFORTDELGRO chairman Lim Jit Poh says the perennial problem of matching demand for taxis with supply cannot be solved by raising flagdown fares and doing away with surcharges.

He was responding to recent newspaper articles calling for the complex menu of surcharges to be dropped and, in their place, for the flag-down rate to be raised, to as high as $10. It is currently $2.50 for non-limo cabs.

'This is too simplistic,' Mr Lim said yesterday at an awards ceremony at the company's Braddell Road headquarters to honour cab and bus drivers and other staff who had provided excellent service.

'If the taxi fare is standard for all locations at all times, which taxi driver will bother driving all the way to the city to meet high demand when he is already in the suburbs?'

Nevertheless, he said cabbies were businessmen and would go where there was business.

He conceded that ComfortDelGro - the biggest cab operator with 15,000 taxis - could do more to better cater to demand.

He said one way was to build a sophisticated call-booking centre. The group has a $53 million centre which caters to around 100,000 calls a day and can prevent 'abuse' by drivers.

'Our system ensures that drivers cannot manipulate the 'On Call' system. If they are not attending to a booking job, they cannot 'pretend' that they are. The call centre is in full control of the situation,' he said.

Commenting on the recent rash of taxi touting cases and a subsequent clampdown by the Land Transport Authority, Mr Lim said the large number of taxi operators today was to blame.

'In the past, when the industry was regulated, there were two major taxi companies. Drivers with bad habits were blacklisted and had nowhere to go,' he noted.

But with more operators following deregulation, competition for drivers had intensified. It meant that bad drivers whose services were terminated by one company had no trouble joining another company, he said.

But, according to the LTA, more than two-thirds of cabbies nabbed for touting, overcharging or refusing to pick up fares in the recent crackdown were from the big companies.

Some cabbies, however, felt there were touts because the demand for cabs was too high.

Cabby Chew Lian Sheng, 37, said: 'You go to a taxi stand in Clarke Quay and see a queue of cabs waiting for passengers. You think there will be a market for touts?'

He said taxi fares here were just too low. 'Even a maid on $350 monthly salary can afford to take a taxi. Primary school children can afford to book taxis,' he said.

Among those who have argued for a higher flag-down fare is Straits Times contributor Han Songguang, a postgraduate student at the National University of Singapore.

Citing the long line of taxis snaking towards Changi Airport every day, he said: 'You could see this as proof that the surcharge works.

'But then, couldn't these empty taxis be better deployed to other areas of the city where demand is higher and the waiting time much shorter for the cabbies?'

He felt the various surcharges created false demand and distorted the market. Once basic fares were raised, the market would adjust itself.

Commuters' expectations also had to be adjusted. 'The cheap-and-good mentality needs to be redefined,' he said.

Mr Lim Chong Boo, managing director of Premier Taxis, a newcomer in the business with 2,300 cabs, is also convinced that fares must rise. 'This is to help cabbies cope with fast-rising diesel prices and inflation,' he said.

For now, the industry is waiting for market leader ComfortDelGro to make the first move.

The giant, with close to a 70 per cent share of Singapore's 23,000-strong taxi market, has refused to comment on fare changes and Mr Lim stayed away from the topic in his speech as well yesterday.