A new car ride-sharing service offering trips between Singapore and Johor Baru will now be operated as a three-week "trial" without any money changing hands.
Drivers taking part in Grab's GrabHitch Inter-Country Service, which was launched on Monday, were to receive an average of $12 from passengers towards fuel costs.
However, the Land Transport Authority (LTA) has said a paid service would violate regulations in both Singapore and Malaysia.
"Malaysian-registered cars are not allowed to provide hire and reward services in Singapore without a public service vehicle licence," the LTA said, adding that Singapore-registered vehicles would also need to be licensed to offer such services in Malaysia.
"Grab should ensure that any cross-border carpool service does not contravene Singaporean or Malaysian regulations," it added.
A Grab spokesman said it is now running GrabHitch JB-SG as a "fare-free pilot programme" to test its feasibility. She said: "During this three-week fare-free pilot, we will test out the model and engage with the LTA in Singapore and regulatory authorities in Malaysia on the use of carpooling solutions to improve connectivity between Singapore and Johor Baru."
Grab declined to comment on its plans after the three-week trial, which ends on July 8.
Desktop systems specialist Azmi Maniku will consider using the service to travel to Johor but believes the regulations are not foolproof. "Even if the service is free, drivers and riders themselves could negotiate a small token for fuel," said the 33-year-old.
Carpooling regulations brought in last year allow drivers to be paid for offering rides within Singapore, though payment should not exceed expenses incurred.
GrabHitch, introduced last November, is a ride-sharing service allowing passengers to pay drivers based on pick-up and drop-off locations, with a trip from Jurong East to Tanjong Pagar costing $8.20, almost half the price of an equivalent taxi journey.