Ride-hailing firm Grab will raise its fares by $1 from next month to improve driver earnings amid rising fuel and maintenance costs, it said.
With taxi and private-hire car ridership at just 55 per cent of pre-pandemic levels as a result of the Covid-19 phase two (heightened alert) measures, Grab said it will not collect commission on the additional $1 from June 1 to June 30.
This means drivers will get $1 more for every trip they complete with Grab for a month.
To help commuters adjust to the new fares, Grab said it will offer $1 vouchers for peak-hour rides from June 1 to June 14. Each Grab user will get two vouchers per day, and can use them on weekdays from 7am to 9am and 5pm to 7pm, and on weekends from 11am to 6pm. There is a limit on the total number of vouchers that can be claimed.
With this fare hike and its other support measures, an average driver could recover up to 50 per cent of earnings lost due to the current Covid-19 restrictions, Grab said. This is not including any additional income from deliveries.
This is the first time the firm is raising its base fare since 2017.
The hike will apply to all of Grab's transport services, except for its standard taxi booking service, its carpooling service GrabHitch and its GrabCoach service, Grab Singapore's managing director for transport Andrew Chan said in a message to drivers yesterday.
In December last year, Grab began charging a platform fee of 30 cents for rides booked through it.
This came after the Competition and Consumer Commission of Singapore lifted restrictions that prevented Grab from changing its pricing policy.
Grab said the latest fare hike comes after "deep discussions" with its drivers and tripartite partners, who said fares have not kept up with the cost of providing transport services. "The pandemic situation as we see today is volatile and we know we cannot wait any longer," Mr Chan said in his message to drivers.
Grab also rolled out a suite of support measures for drivers. This included additional incentives for drivers who complete delivery jobs in designated high-demand areas, and fixed-value cash rebates based on the total number of transport and delivery jobs that drivers complete during pre-designated hours.
Eligible drivers who rent their vehicles from Grab's vehicle rental arm, GrabRentals, will also get a rental rebate of up to $45 per week.
Six of Grab's fleet partners will also offer rental rebates.
Other operators have rolled out their own support measures.
Singapore University of Social Sciences transport economist Walter Theseira said a fare hike was inevitable, as costs have gone up in the past few years but operators were unwilling to raise fares. The pandemic has exacerbated the situation as utilisation of taxis and private-hire cars is low, and drivers can no longer rely on surge pricing.
With Grab's fare hike, all eyes will be on how its rivals Gojek and ComfortDelGro react, Associate Professor Theseira said.
ComfortDelGro's group chief branding and communications officer Tammy Tan said her firm will not be adjusting its fares any time soon as demand has not yet returned to pre-Covid-19 levels.
Gojek, which introduced a 70-cent platform fee in March last year, declined to comment.
The Public Transport Council said its focus is to ensure fares are transparent and clearly communicated, and it has reminded Grab of this.
The fare hike has sparked backlash among commuters and drivers, with some calling for Grab to cut its commission fee instead.
But for drivers like Mr Joseph Goh, 55, every dollar counts. He said: "Any increase in earnings is good during this pandemic."