Grab eyes slice of street-hail market

Its GrabNow service will let users pay for flagged taxi rides via app from next month

Ride-booking app Grab will roll out its GrabNow service in Singapore by the second half of next month, allowing commuters to pay for street-hailed taxis through its app.

The move is indicative of the start-up's attempt to grab a slice of the street-hail market, which accounts for about three-quarters of all taxi rides here.

The firm told The Straits Times it has started training cabbies to use GrabNow, which is already available in Jakarta for its motorcycle pick-up service there.

In Singapore, passengers who flag a taxi will be able to "pair" or link up their Grab apps with their cabbies'.

The fares, which go by the taxi meter, can be paid through the app.

Cabs which offer GrabNow will be identifiable with a decal.

Head of GrabTaxi Singapore Melvin Vu said GrabNow "digitises the street-hailing experience for taxi rides" so that passengers can have cashless payment and also collect the app's reward points.

The GrabPay mobile payment platform accepts credit cards and Alipay, and has a credit top-up system.

Mr Vu said the auto-pairing between a cabby and passenger would take about 15 to 20 seconds, and would be done before a ride starts.

Grab will not take a commission from cabbies from GrabNow rides.

Mr Vu added that there are no plans to launch GrabNow for Grab's private-hire cars, which cannot pick up passengers from the street.

Some taxi drivers said GrabNow could help them win over customers, such as those who like using ride-hailing apps.

But relief cabby Tony Soh, 63, who drives for Comfort, said he was not sure if it will increase business.

He said: "There are already few people who hail taxis in the heartland. I've to travel to the city to get street pick-ups now... In the past, it was easier for me to make $120 to $130 from street pick-ups alone driving from 3pm to midnight. Now I can make only about $100 a day."

Observers said it remains to be seen if GrabNow will take off.

Dr Lee Der Horng, a National University of Singapore transport researcher, said: "I don't think GrabNow can win over many (new) passengers, unless they offer handsome discounts on fares... Cash payment is not a major issue (for taxi users) here. We are not talking about hundreds of dollars."

Singapore University of Social Sciences senior lecturer Walter Theseira said: "If you prefer to use street-hail, do you want to go through the trouble of pulling out your phone, activating the app and telling the driver you want to do this?"

Dr Theseira said GrabNow is likely part of Grab's plan to expand the ways in which its app can be used. "The more opportunities you have to use credits to pay for various things, the more likely it can become a viable cashless payment alternative in general."

Grab chief executive Anthony Tan has previously said that he is considering expanding the firm's offerings into electronic money transfers and loans.

GrabNow also faces competition from ComfortDelGro, noted Dr Lee. The biggest cab operator with more than 15,680 taxis will make available the mobile payment system MasterPass for street-hailed Comfort cabs starting next month.

In comparison, Grab has signed partnerships with the other taxi firms - SMRT, Premier, Prime and Trans-Cab - for drivers to use its app. They have 10,390 taxis in all.

Commuters such as public relations associate Pravin Nair, 26, said GrabNow will save him "the hassle of passing the driver cash or credit cards".

Mr Al Malik, 25, a Grab user, said that being able to collect points for street-hailed taxi rides will be a boon. But the national serviceman added: "The big downside for me is the meter fare which is a turn-off. I choose ride-sharing apps over street-hailing for their fixed rates."

A version of this article appeared in the print edition of The Straits Times on July 27, 2017, with the headline 'Grab eyes slice of street-hail market'. Print Edition | Subscribe