Commuters cheer dynamic pricing, but some cabbies unhappy

More than 10,600 taxis from five cab companies started offering dynamic pricing using the JustGrab function in the Grab app. Some commuters lauded the service but others were unable to use it.ST VIDEO: OLIVIA CHANG
A check by The Straits Times comparing the various taxi and private-hire options showed that JustGrab fares tended to be cheaper than Grab's own private-hire car service GrabCar, but fluctuated against ComfortDelGro taxi fares.
A check by The Straits Times comparing the various taxi and private-hire options showed that JustGrab fares tended to be cheaper than Grab's own private-hire car service GrabCar, but fluctuated against ComfortDelGro taxi fares.PHOTO: ST FILE

It was a new option for commuters that was also supposed to cast a wider net for taxi drivers.

But yesterday, as Grab rolled out a new dynamic pricing option for taxi bookings in tandem with five taxi companies, one group seemed happier than the other.

Commuters liked the largely lower fares and upfront charges.

Cabbies, however, were less enthused by the new fare option called JustGrab, with some saying that lower fares could hurt their earnings.

A check by The Straits Times comparing the various taxi and private-hire options showed that JustGrab fares tended to be cheaper than Grab's own private-hire car service GrabCar, but fluctuated against ComfortDelGro taxi fares.

For example, a ride from Shenton Way to Jurong East during the evening peak hour cost $31 with JustGrab, and $35 with GrabCar. The same journey cost $24 using a booked ComfortDelGro cab.

At the same time, a ride from Shenton Way to Tampines cost $31 with JustGrab, $37 with GrabCar and $40 with ComfortDelGro.

Still, commuters were mostly in favour of the new service.

Stockbroker Annalise Krishnan, 44, paid $11 using JustGrab for a ride from Bishan to Raffles Place at around 1pm. This was about $3 cheaper than if she were to use GrabCar - her usual option.

"I was surprised to see an SMRT cab pick me up because it's usually private-hire cars that come," she said. "I think surge pricing is going to become an inevitable part of the industry as consumers enjoy knowing the price of their ride upfront."

Madam May Yeo, a 59-year-old housewife who was at Westgate mall's taxi stand, said Grab rides tend to be cheaper because of the frequent promotional codes offered. She added that she would opt for whichever option was the cheapest.

Grab said that under JustGrab, taxis will have the same fare structure as its GrabCar private-hire car service, which starts from a base fare of $2.50 and has a rate of 50 cents per kilometre - cheaper than the fares of metered taxis.

But like private-hire cars, fares would also rise based on demand.

Grab told customers in an e-mail yesterday that JustGrab will have more than 50,000 taxis and private-hire cars available, with the nearest one dispatched to the passenger.

There are about 10,600 cabs from five companies - SMRT, Trans-Cab, Premier, Prime and HDT Singapore Taxi - under this scheme.

Grab added that JustGrab fares "will be at least 10 per cent cheaper" than if customers were to book via the GrabCar service, which will send only a private-hire car.

An SMRT cabby, who did not want to be named, said that some JustGrab fares were "too low". For instance, he added, a journey from Ghim Moh to Havelock Road at 7am would fetch a fee of $8, compared with $14 going by the taxi meter.

"I would prefer getting a passenger from the street," he said.

A 53-year-old cabby, who wanted to be known only as Mr Wee, said: "A ride from VivoCity to Telok Blangah is just $5 on JustGrab. And I have to give 50 cents of that to Grab. The pricing is not right."

For JustGrab jobs, cabbies have to pay a 10 per cent commision to Grab compared with 30 to 50 cents for company bookings.

ComfortDelGro, the largest taxi player with a 60 per cent market share, said that it would not launch dynamic pricing for now. Instead, it would offer a flat-fare option based on the current metered rates.

It said yesterday that it would introduce this on April 10.

• Additional reporting by Annika Mock, Nathasha Lee, Raynold Toh and Selina Xu

Correction note: The $40 fare from UOB Plaza to Tampines was for a MaxiCab ride. When the ST reporter used the ComfortDelGro app to book a taxi, a MaxiCab was dispatched. The reporter was told that regular taxi fares would be charged. The journey of 16.2km took 47 minutes, with a meter fare of $26.40, ERP of $1, city area surcharge of $3, current booking of $3.30, and peak-hour levy of $6.60.

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A version of this article appeared in the print edition of The Straits Times on March 30, 2017, with the headline 'Commuters cheer dynamic pricing, but some cabbies unhappy'. Print Edition | Subscribe