SINGAPORE - Ride-hailing operator Gojek will halve the commission it receives from its drivers from June 21 till at least the end of 2022 to help them increase their earnings.
This means Gojek drivers will get to keep 90 per cent of the fare from every trip, instead of 80 per cent.
The move comes after Grab, the dominant ride-hailing operator here, said it would seek to improve drivers' earnings by introducing a $1 fare hike from this month.
Gojek said on Monday (June 14) that the cut in commission, which it refers to as service fees, will help to lessen the impact of the Covid-19 pandemic on its drivers. It said a survey it conducted found that 50 per cent of drivers want lower service fees for better earnings.
Gojek will also introduce a payout of $3 to drivers who have to drive 3km or more to pick-up their passenger, among other measures.
Its general manager, Mr Lien Choong Luen, said: "The ongoing impact of the pandemic is a consistent worry for our driver-partners as they try to sustain their earnings amid the uncertainty.
"These measures will have a profound impact on the livelihoods of our driver-partners, increasing their take-home earnings while giving them more flexibility by reducing their dependence on incentives."
Gojek said the changes reflect a significant investment in Singapore as it seeks to grow its market share here.
It also said that a recent campaign to provide free or discounted rides to and from vaccination sites for all riders in Singapore has registered 117,500 rides so far.
Several drivers have been calling for ride-hailing operators to cut their commissions to help drivers tide over the impact of the pandemic.
While Grab has not announced a cut of its 20 per cent commission rate, it said last month that it will permanently raise fares by $1 from this month to improve driver earnings amid rising fuel and maintenance costs.
It will not collect commission on the additional $1 from June 1 to June 30. This means drivers will get $1 more for every ride they complete with Grab for a month.
Associate Professor Walter Theseira of the Singapore University of Social Sciences said that Gojek's move to lower driver commissions has not been seen for years in the local market.
Prof Theseira, who teaches economics and looks at urban transport issues, noted that what matters most for drivers is their take-home earnings, which is also affected by the number of passengers a platform can attract.
"Gojek would very likely have to combine commission cuts to drivers with measures to encourage commuters to switch," he added.
"Otherwise, you would have more drivers chasing the same number of commuters, which means their take-home earnings could go down after switching to Gojek."
Ms Yeo Wan Ling, adviser to the National Private Hire Vehicles Association, said the association welcomes Gojek's decision to cut its commission rates.
"We foresee that the road to recovery during Phase 3 (Heightened Alert) and beyond will take time, and we hope that this is something that other private hire platforms can also consider to support our drivers' livelihoods and well-being," she added.