Ride-hailing rivalry heats up as Grab eyes car-pooling option

An advertisement for private-hire car service Grab at Bukit Merah View Market and Food Centre.
An advertisement for private-hire car service Grab at Bukit Merah View Market and Food Centre. PHOTO: ST FILE

The battle between ride-hailing services Grab and Uber continues, with Grab now looking to roll out a car-pooling feature, just months after its rival started a similar service.

GrabShare will allow passengers to share a ride with a stranger going in the same direction, for a lower fare. Sources said the launch could be in the next few weeks.

The car-pooling option will likely be available to customers using Grab's private-hire GrabCar service.

Grab currently has another car-pooling service called GrabHitch, but it uses a separate group of drivers who ferry others on a not-for-profit basis. This will not be scrapped, sources said.

When asked, the firm declined to reveal details about the new product, including the fares it will charge but a Grab spokesman said it is "constantly experimenting with new point-to-point transport offerings".

The car-pooling option will likely be available to customers using Grab's private-hire GrabCar service.

However, Grab drivers, speaking to The Straits Times, said that since last month, the firm has been notifying them about GrabShare via e-mail, and requiring them to undergo training.

Private-hire car driver Chase Phang, 39, said: "GrabShare seems like the same product to compete with UberPool."

In July, Uber launched a car-pooling option for its UberX service called UberPool, which offers customers fares of up to 25 per cent less if they share rides.

In the Uber model, users indicate before making a booking if they want to share their rides. Uber then matches passengers headed in the same direction, and notifies drivers via the app if there are other people to pick up along the way.

If there are no matches, the passenger takes the ride alone, but he will still pay the UberPool fare, which is quoted upfront, at the time of booking.

About one in every three UberX trips in Singapore is car-pooled.

Assistant Professor Yang Nan, from the National University of Singapore Business School's strategy and policy department, said it was not surprising that both start-ups are experimenting with new ideas, and learning from each other in an industry that is still developing.

However, there can be downsides too. He said: "When product offerings become more similar, it is usually pretty bad news for the competing firms. If differentiation fails... competition often comes down to price wars."

While customers benefit in the short run, Prof Yang said: "In the long run, if the mark-ups are so thin that firms can't survive on them and the market becomes too concentrated, it's probably not good for consumers."

Former equity analyst Eric Teo, 42, who has used the UberPool service, said car-pooling offers another commuting option, as the cost is somewhere between taking a taxi and that of taking a bus.

He said: "I use it when I'm not in a rush, as making a detour to pick up the other passenger and drop him off could add another 10 minutes to 20 minutes to my journey."

A version of this article appeared in the print edition of The Straits Times on November 23, 2016, with the headline 'Ride-hailing rivalry heats up as Grab eyes car-pooling option'. Print Edition | Subscribe