Grab applies to impose platform fee for each ride; competition watchdog seeks public feedback

Grab applies to impose platform fee for each ride; competition watchdog seeks public feedback

A man walks past a Grab office in Singapore
A man walks past a Grab office in Singapore. (Photo: Reuters/Edgar Su)

SINGAPORE: Ride-hailing firm Grab has applied to implement a S$0.30 platform fee (S$0.32 with GST) on each ride to help cover its costs, the Competition and Consumer Commission of Singapore (CCCS) said on Tuesday (Jul 28).

“Grab submitted that the S$0.30 platform fee per ride will enable Grab to maintain and enhance the various safety measures and other relevant operating costs,” the competition watchdog said in a media release.

“A third of the funds collected through the platform fee will be committed towards providing benefits for driver welfare.”

In its application, Grab said that a platform fee is “in line with ride-hailing industry norm”, pointing out that Gojek has levied a S$0.70 platform fee, while ride-hailing services in other countries charge service or booking fees.

READ: COVID-19: Grab cuts 360 employees in 'last organisation-wide layoff' this year

The CCCS is now inviting members of the public to feedback on the proposal from Tuesday until Aug 11.

Grab is not allowed to change its prices or products without approval from the CCCS after its acquisition of Uber’s Southeast Asian business in 2018.

Uber had sold its Southeast Asian business to Grab for a 27.5 per cent stake in Grab in return, with the competition watchdog saying the transaction had infringed on the Competition Act.  

It had led to a “substantial lessening of competition” in the provision of ride-hailing platform services in Singapore, the CCCS said.

Directions were issued to both companies to “lessen the adverse impact of the transaction on drivers and riders and to keep the market open and contestable”.

Under these directions, Grab is required to maintain its pre-transaction pricing, its pricing policies and product options, including driver commission rates and structures, for all its products in the ride-hailing platform services market.

While it can apply to the CCCS to vary or remove the directions, it cannot change its pricing without approval from the watchdog.

READ: Growth in food delivery business not enough to cover transport decline amid COVID-19 outbreak, says Grab Singapore head

“Grab invests heavily to provide a safe and pleasant experience on its platform,” the company said on its application.

“These investments centre around improving their safety and security, fraud prevention and identity protection as well as programmes to protect drivers’ livelihoods and well-being.”

In a separate statement, Grab's managing director for transport Andrew Chan said the company invests "millions annually" to build and maintain tech features on its passenger and driver apps that "contribute to the experience and service levels".

"Over 80 tech improvements were implemented on the platform in 2019," said Mr Chan. 

Mr Chan said that existing Grab features such as number-masking, the emergency button and driver identity verification "help to safeguard our users' safety and security, as well as prevent fraud". 

"Others, like the driver telematics and heat-map, support our driver-partners' well-being and livelihoods while they are on the roads."

The CCCS said it would consider if Grab should be allowed to recover the investments it said it has made into passenger safety and driver benefits, and what nature and types of investments should be taken into account, among others.

Mr Chan also said that with the one-third contribution from the platform fee to drivers' welfare, Grab will look at rolling out improvements such as doubling the benefit coverage of personal accident insurance for private-hire vehicles, training allowance for drivers to upskill and reskill, and a higher contribution to the GrabCar Medisave Match Programme.

"We hope to seek favourable responses from our driver-partners and passengers through this public consultation process, and look forward to providing an even more enjoyable ride experience that value-adds to their everyday lives to them," said Mr Chan.  

Members of the public can send their feedback to the CCCS via email by 5pm on Aug 11. 

Source: CNA/mi(hs)

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