Confusion and Concern as Malaysian Taxi Drivers Await Details on Singapore Cross-Border Drop-Off Changes

Uncertainty Clouds New Cross-Border Taxi Regulations

A recent agreement between Malaysia and Singapore to allow cross-border taxis to drop off passengers anywhere in the destination country has left many Malaysian taxi drivers confused and seeking clarification. The transport ministries of both nations announced the enhancement to current regulations on December 5, 2025, but failed to specify when these changes would take effect or provide detailed implementation guidelines. This lack of clarity has created anxiety among drivers who operate the busy Johor Bahru-Singapore route.

Abdul Rahman Atan, the 60-year-old coordinator at Larkin Sentral Terminal in Johor Bahru, described the current situation as “vague” in an interview with The Star. He noted that most taxi drivers were relying on news reports and social media for information about the new policy rather than receiving official briefings from authorities.

“Until today, nobody from the authorities has come to explain the new ruling. The policy lacks specific details,” Abdul Rahman told The Star.

The confusion persists despite the joint statement from both transport ministries announcing significant changes to the Cross-Border Taxi Scheme (CBTS). AsiaOne confirmed that the enhancements announced in December had yet to be implemented on either side of the border, and Singapore’s Ministry of Transport indicated there were no new updates beyond the original December 5 statement.

Background on Cross-Border Taxi Operations

The Cross-Border Taxi Scheme has been in place for years, allowing licensed taxis from both countries to ferry passengers across the heavily trafficked Johor-Singapore Causeway. Under current regulations, only 200 taxis from each country are permitted to operate cross-border services, with strict limitations on where they can pick up and drop off passengers.

Currently, Malaysian-registered taxis are restricted to a “terminal-to-terminal” service, operating only between Larkin Sentral in Johor Bahru and Ban San Street Terminal in Singapore. Meanwhile, Singapore-registered taxis have already enjoyed the privilege of dropping passengers off at various locations in Malaysia, though they must still pick up passengers at designated points.

This asymmetric arrangement has been a point of contention for Malaysian drivers, who have faced stiff competition from both legal Singaporean taxis and illegal operators offering door-to-door services. The new agreement aims to level the playing field by allowing all licensed cross-border taxis to drop off passengers anywhere in the destination country, while still restricting pick-ups to designated points to prevent them from providing local point-to-point services.

The fixed fare structure reflects the terminal-to-terminal nature of the current system. A one-way trip from Larkin Sentral to Ban San Terminal in Singapore costs RM120 (approximately $29.20), while a one-way journey from Singapore back to Johor Bahru is around S$60 ($46.30). Trips from most other Singapore locations to Larkin Sentral are priced at S$80 ($61.80).

The Competitive Landscape

The cross-border taxi market has faced challenges from illegal operators who offer more flexible door-to-door services at competitive prices. Singapore’s Land Transport Authority has cracked down on these unauthorized operators, with more than 140 vehicles seized for operating illegal cross-border services. Despite these enforcement efforts, illegal operators continue to attract customers who value the convenience of direct transportation to their final destination.

This competitive pressure has made it difficult for licensed cross-border taxi drivers to earn a sustainable income, particularly Malaysian drivers who face more restrictions. The new drop-off flexibility is intended to make legal services more attractive to passengers and help drivers compete more effectively against illegal operators.

Details of the New Agreement

The joint announcement by Singapore’s Acting Transport Minister Jeffrey Siow and Malaysian Transport Minister Anthony Loke outlined several key changes to the Cross-Border Taxi Scheme. The most significant modification is the permission for licensed foreign taxis to drop off passengers anywhere within the other country, effectively removing the terminal restriction that has constrained operations.

The agreement also includes plans to gradually increase the quota for licensed cross-border taxis from 200 to 500 vehicles per country. This expansion will be implemented in stages, with each country initially providing an additional quota of 100 vehicles. These new licenses will be prioritized for larger and more premium vehicles that can accommodate larger groups and business travelers.

Under the new framework, all licensed cross-border taxis must be clearly identifiable through specific livery and tamper-proof vehicle plates. They will also be required to install Singapore’s ERP2 on-board unit for entry into the country. For Malaysian taxi operators, this represents a significant technical upgrade that comes with additional costs.

The transport ministries also stated they would gradually increase the number of pick-up points for ride-hail or e-hailing app bookings. This suggests a move toward digitization of the booking process, though full liberalization of cross-border ride-hailing services remains off the table for now.

“We have no plan to fully liberalise cross-border point-to-point transport via ride-hail services,” Singapore’s Land Transport Authority clarified in an August 2025 statement.

Beyond taxi services, both transport ministers agreed to “work towards aligning regulatory regimes” to improve cross-border bus services for tourism. They also discussed adjusting operating times for cross-border buses, with Malaysian authorities requesting that Singapore buses begin operations from Johor Bahru at 4:00 AM to address early morning crowding.

Implementation Uncertainty and Driver Concerns

Despite the positive aspects of the announcement, Malaysian taxi drivers have expressed significant anxiety about the implementation timeline and specific requirements of the new scheme. The lack of official communication from authorities has left many drivers uncertain about how to prepare for the changes.

Yunos Makon, a 60-year-old veteran taxi driver, highlighted concerns about the proposed expansion of the licensed fleet from 200 to 500 vehicles. He worries this increase could lead to market saturation, driving down earnings and intensifying competition among drivers.

“This could cause market saturation, which would drive down earnings and increase competition,” Yunos Makon was quoted as saying in The Star report.

These concerns are not unfounded, as current data suggests the existing quota is already underutilized. According to reports, only about 150 of the 200 licensed taxis on each side are actively plying the Johor Bahru-Singapore cross-border route. This raises questions about whether there is sufficient demand to support an expanded fleet of 500 vehicles per country.

Drivers are also concerned about potential congestion at terminals and along the Causeway with more taxis operating the route. Singaporean taxi driver Chamkaur Singh, who has nearly 50 years of experience, expressed worry about insufficient parking space for additional taxis at both terminals. He also noted that congestion along the Causeway could worsen, especially when it already takes him two to three hours to cross daily.

Rosli Ali, a 60-year-old driver, mentioned that he typically manages only three trips a day due to traffic jams on the Causeway. With more vehicles potentially competing for the same road space, these delays could increase, further limiting the number of trips drivers can complete each day.

Economic Implications and Fare Considerations

The economic viability of the enhanced Cross-Border Taxi Scheme remains a subject of debate among drivers, economists, and transportation experts. A key concern is whether the current fare structure will remain appropriate under the new operating model.

Azmi Ahmad, a 54-year-old taxi driver from Tampoi with over 20 years of experience, believes fares need to be reviewed to reflect the potentially longer distances drivers will travel when dropping off passengers anywhere in the destination country.

“It’s only fair to reassess the fares, as taxis will now be dropping off passengers further than before. The fares should reflect the reality of the longer journey,” Azmi said.

Walter Theseira, a transport economist from Singapore University of Social Sciences, noted that Singapore-registered taxis might be hesitant to operate on flexible routes if fare adjustments for peak periods are not permitted. He highlighted that fixed pricing creates imbalances in supply and demand, particularly during high-congestion weekends or festive seasons.

The current fare structure does not account for variations in drop-off locations, which could create challenges for drivers. For example, Azman Hon, a 63-year-old Singaporean taxi driver, pointed out that operating costs would rise due to the larger geographical area of Malaysia compared to Singapore.

“If we pick up a passenger from Singapore to Muar, the journey takes more than two hours. On the way back, we can’t pick up passengers, and the taxi travels empty,” Azman explained.

This empty return trip problem could significantly impact the profitability of cross-border operations, particularly for Singaporean drivers venturing further into Malaysia. Without a flexible pricing mechanism or guaranteed return fares, drivers may be reluctant to accept longer journeys.

Proposed Solutions to Fare Issues

Mohamad Yazid, a 58-year-old driver from Bedok, suggested the introduction of more pickup points and a centralized booking system similar to e-hailing platforms specifically for cross-border taxis. Such a system would allow drivers to plan their trips more efficiently, reduce waiting time, and ensure fair access to passengers for drivers from both countries.

The Johor Bahru-Singapore Cross-Border Taxi Association, which has approximately 189 members, has indicated it will meet with Malaysia’s Land Public Transport Agency (APAD) to discuss fare coordination and other implementation matters.

“We hope to receive positive feedback from APAD and the government regarding the issues raised,” said Mohd Suhaimi Saidi, chairman of the association.

Technical Requirements and Implementation Costs

One of the immediate concerns for Malaysian taxi drivers is the cost of upgrading their vehicles to meet new technical requirements. The new scheme requires all licensed taxis to install Singapore’s updated ERP2 on-board unit for entry into the country.

According to Abdul Rahman, Malaysian taxi drivers have been informed that the new ERP card reader will cost approximately S$600 (RM1,895). This represents a significant investment compared to the existing ERP card reader in Malaysian-registered taxis, which cost S$150 (RM474).

For many drivers, especially those already struggling with income uncertainty, this additional expense creates a barrier to participation in the enhanced scheme. The financial burden is particularly concerning given that the benefits of the new system, such as increased flexibility and potentially higher earnings, remain uncertain until full implementation details are released.

Drivers are also concerned about other potential implementation costs that may not have been fully disclosed yet. These could include insurance upgrades, vehicle modifications to meet livery requirements, and fees associated with new licensing or registration processes.

Passenger Perspective and Benefits

Despite the challenges and concerns from drivers, passengers have generally welcomed the announcement of more flexible drop-off options. The convenience of door-to-door service has long been a key selling point for illegal operators, and legalizing this option for licensed taxis should make their services more attractive to travelers.

Singaporean Pah Yew Heng, a 40-year-old private-hire driver, expressed that he would now be more inclined to book cross-border taxi rides if unable to secure train tickets into Johor Bahru, thanks to the flexibility in drop-off points. However, he noted that he would still prefer taking the train when possible due to the high cost of taxi rides and heavy congestion on the Causeway.

For passengers with mobility challenges or those carrying heavy luggage, the new policy offers significant benefits. Retired Johorean John Lim, a 75-year-old who uses a walking stick and is partially blind and deaf, has used illegal cross-border rides in the past to get to his home in Bedok, Singapore.

“When I take the taxi, after stopping in Ban San Street, I still have to take the MRT to Bedok,” Lim explained, highlighting the inconvenience of the current terminal-based system.

The ability to be dropped off directly at their destination would greatly improve the travel experience for passengers like Lim, who find multi-leg journeys challenging. This convenience could potentially attract more travelers to use legal cross-border taxi services rather than opting for public transportation or illegal operators.

Passengers also appreciate the safety and regulatory oversight that comes with licensed taxi services. With the new regulations making legal services more convenient, many travelers may be willing to pay a premium for the peace of mind that comes with using authorized transportation.

Comparison with Illegal Operators

One of the primary goals of the enhanced Cross-Border Taxi Scheme is to reduce the market share of illegal taxi operators who currently offer more flexible services. These unauthorized providers have flourished by addressing consumer demand for door-to-door transportation that legal taxis could not provide under previous regulations.

Taxi driver Balakumaran Kalipan, 45, noted that when illegal operators known as “Pak Wanca” were active, people didn’t mind paying higher prices because they offered direct service to passengers’ doorsteps. Under the previous rules, Malaysian taxis were restricted to dropping off only at Bugis (near Ban San Street Terminal), making them less attractive to passengers.

By legalizing flexible drop-off points for licensed taxis, authorities hope to redirect demand toward regulated services that meet safety standards and contribute tax revenue. However, the success of this strategy will depend on several factors, including fare competitiveness, implementation quality, and enforcement against remaining illegal operators.

The enhanced scheme must balance flexibility with regulation to prevent licensed taxis from effectively becoming local taxi services in the neighboring country. This is why the agreement maintains restrictions on pick-up points, requiring foreign taxis to only collect passengers at designated locations. This provision aims to protect domestic taxi industries in both countries while still providing greater convenience for cross-border travelers.

Timeline and Implementation Expectations

The absence of a clear implementation timeline has been a significant source of frustration for drivers and operators. Malaysian taxi drivers have expressed hope that the situation will become clearer by January or early February 2026, before the Chinese New Year and Hari Raya Aidilfitri festive periods in February and March respectively.

These festivals typically generate substantial travel demand between Malaysia and Singapore, as families cross the border to celebrate with relatives. Missing out on this peak period due to implementation delays would be a significant financial blow to taxi operators who are banking on the new system to increase their earnings.

The complexity of coordinating regulatory changes between two countries may be contributing to the delayed implementation. Both Singapore’s Land Transport Authority and Malaysia’s Land Public Transport Agency need to align their procedures, technical systems, and enforcement protocols before the new scheme can launch effectively.

Additionally, the development of a regulatory framework for cross-border ride-hailing platforms, as mentioned in the joint statement, requires careful consideration to ensure fair competition while protecting the interests of domestic taxi and private hire drivers.

Drivers and operators are now waiting for detailed implementation guidelines that address their concerns about fares, technical requirements, and operational procedures. Until these specifics are released, the potential benefits of the enhanced scheme remain theoretical rather than practical.

The Bottom Line

• Singapore and Malaysia agreed on December 5, 2025, to allow cross-border taxis to drop off passengers anywhere in the destination country, with pick-up still restricted to designated points.
• The quota for licensed cross-border taxis will increase from 200 to 500 vehicles per country, implemented in stages.
• Malaysian taxi drivers have expressed confusion and anxiety about the new regulations due to lack of official communication and implementation details.
• Drivers are concerned about potential market saturation, fare structures that don’t account for longer distances, and the cost of required technical upgrades including new ERP2 units.
• Current standardized fares include RM120 for Larkin to Ban San Terminal and S$60 for Singapore to Johor Bahru, which may need review under the new flexible drop-off system.
• Illegal operators have historically captured market share by offering door-to-door services that legal taxis could not provide under previous regulations.
• Passengers, particularly those with mobility challenges or heavy luggage, welcome the convenience of flexible drop-off options.
• Authorities aim to implement the changes before the Chinese New Year and Hari Raya festive periods in early 2026, though no official timeline has been announced.
• The new scheme requires all licensed taxis to install Singapore’s ERP2 on-board unit and be clearly identifiable through specific livery and tamper-proof plates.
• Both countries are working toward a regulatory regime for cross-border ride-hailing platforms but have no plans to fully liberalize cross-border point-to-point transport via ride-hail services.