SINGAPORE: Indian ride-hailing firm Jugnoo wants riders and private-hire drivers in Singapore to have total control over how much their rides cost.
On May 1, it will be rolling out a reverse-bidding pricing system that will emphasise price transparency.
When a rider makes a booking, drivers nearby will be able to bid for the ride.
Drivers will be shown three options by the app: Jugnoo’s suggested price; a price 10 per cent higher; and a price 10 per cent lower. They can select one of the three as their bid, or they can choose to input their own price.
The rider will then choose from the bids based on each driver’s rating, bid price and how long they will have to wait for the ride.
Jugnoo CEO Samar Singla said this "free market system" is an experiment that will reveal more about consumer behaviour. While the entire bidding process may take more effort and will add roughly 10 seconds to what consumers are used to with current ride-hailing algorithms, he believes Jugnoo’s system will address frustration from both drivers and consumers over prices.
“We want to test: do people value control over their transactions more than just (speed)?” said Mr Singla. “If you want to be in control, you must spend a little more time ... what we are trying to achieve is a contrarian approach to a very big problem.”
The system has undergone a small-batch pilot of a few thousand rides, but Singapore is the first city where it will be rolled out on a large scale.
While the idea of reverse-bidding had been in development for a while, Mr Singla said the company was motivated to launch the system in Singapore, rather than its home country, after observing the proposed buyout of Uber by Grab.
The company, based in Chandigarh, was also attracted by Singapore’s open market, high technological penetration, and users’ openness to new technologies.
If it is successful, Jugnoo plans to expand to Scandinavian cities such as Oslo, Stockholm and Copenhagen - markets that believe in the sharing economy.
Jugnoo has the third-largest market share in India using traditional ride-hailing algorithms, after Uber and home-grown Ola.
But they are comfortable where they are, said Mr Singla. Its aim is to be profitable, rather than fight for market share. Their aim is to capture 10 per cent of the market share in Singapore, similar to where they stand in India.
The usual strategy for ride-hailing firms is to aggressively expand their fleet in an attempt to be the dominant market player.
“We’re not hoping to come in and try to take market share,” said Mr Singla. “We are focusing on getting that niche market for people who really want … control. We want to be a niche player.”
Jugnoo hopes to start with a fleet of 500 drivers and clock 2,000 rides per day. For now, it will not charge drivers a commission, but it will eventually take a 10 per cent cut from each ride, the same percentage it charges its drivers in India.
This will put it on par with RydeX’s commission rate, which is also 10 per cent.
Jugnoo will be the fourth player in Singapore’s private-hire ride-hailing market, after RydeX’s launch at the end of this month.