SINGAPORE: From June, passengers using ride-hailing platform Grab will have to pay an additional S$1 as the Singapore-based firm says it wants to improve earnings for its drivers.
The increase - which will apply to all its transport services except the standard taxi, GrabHitch and GrabCoach options on its app - will take effect from Jun 1, with 100 per cent of the S$1 going to drivers for the month of June 2021.
Grab, which typically takes about 20 per cent of each fare, said it will not collect commissions from this S$1 during this period.
“This move comes after deep discussions with driver-partners and tripartite partners, who have feedback that Grab’s transport fares have not kept up with drivers’ rising costs of providing the service,” said the ride-hailing giant in a media release on Tuesday (May 25), pointing to the increasing costs in areas such as fuel, maintenance and repair.
“The revision aims to improve earnings for driver-partners, enabling them to continue providing safe and high-quality service for passengers in a financially viable manner for the longer term,” said Grab, noting it has not revised its transport fares since 2017.
In September 2018, the Competition and Consumer Commission of Singapore (CCCS) imposed a freeze on Grab's pricing mechanism after its deal with Uber was found to have infringed the Competition Act.
CCCS lifted these and other restrictions in November last year after the introduction of a new regulatory framework for the point-to-point transportation industry, with Grab announcing it would introduce a S$0.30 platform fee to its rides.
READ: Grab to charge additional S$0.30 'platform fee' for rides, following lifting of restrictions by competition watchdog
To help consumers adjust to the new fare structure, Grab said it would offer S$1 vouchers for peak hour rides between Jun 1 and Jun 14.
The Singapore-based firm noted ridership “plummeted drastically” last year, with ridership yet to return to pre-pandemic levels.
Last week, Minister for Transport S Iswaran said figures from the Land Transport Authority showed ridership for taxis and private-hire cars had fallen to about 55 per cent of pre-pandemic levels after Phase 2 (Heightened Alert) came into effect.
To increase their earning opportunities, Grab is also encouraging its drivers to take on delivery jobs through its GrabFood, GrabMart and GrabExpress services.
The authorities announced last year that taxi and private-hire drivers would be allowed to do deliveries until the end of September this year, amid a decline in passengers and an increase in demand for delivery services during the coronavirus crisis.
“Grab will be providing additional incentives for driver-partners who complete delivery jobs in designated high demand areas,” the firm said.
“Many of our driver-partners have expressed worries and concern over the viability of their livelihood on the platform as the volatile pandemic situation continues,” said Grab Singapore transport managing director Andrew Chan.
“Many driver-partners have pivoted to also taking on delivery jobs to supplement their earnings and Grab wants to show further support by introducing short-term initiatives to reduce their financial stress during this period.”
It added that eligible drivers leasing their vehicles through its vehicle rental arm GrabRentals can also benefit from a rental rebate of up to S$45 per week, depending on their current rental fees.
Grab said six of its fleet partners - Lion City Rentals, AutoExchange Leasing, KH Leasing, MS Carz Leasing, Prime Transport & Limousine Services and Roset Limousine Services - have also committed to offering rental rebates for eligible hirers.
Drivers will also be entitled to cash rebates based on the total number of transport and delivery jobs they complete during “pre-designated hours”, it said, adding that it will maintain its current driver benefits programme until September this year.
“We trust that this holistic approach of lowering costs, increasing earning opportunities and enhancing their safety net will address the main challenges our driver-partners are facing right now and better protect them for the future,” said Grab’s Mr Chan.
Ms Yeo Wan Ling, an advisor to the National Private Hire Vehicles Association (NPHVA), said the association was appreciative that Grab had acknowledged the concerns of drivers.
“We foresee that the road to recovery beyond Phase 2 (Heightened Alert) will take time, and we hope that Grab will continue to support our members’ livelihoods and well-being, such as relooking into commission structures, and assistance should they be issued with quarantine orders and have their livelihoods affected,” said the Member of Parliament for Pasir Ris-Punggol GRC.
READ: Additional S$27 million support for taxi, private-hire drivers amid heightened COVID-19 restrictions
Last Friday the Land Transport Authority said that taxi and private-hire car drivers whose incomes have been affected by the heightened COVID-19 restrictions would receive an additional S$27 million from the Government through the COVID-19 driver relief fund until the end of June this year.
This is on top of the S$188 million already committed for payments through the fund, allowing drivers to receive S$25 per vehicle per day as part of support for the beleaguered industry.