Grab free to change pricing policies, commission rates

Watchdog-imposed freeze ends; ride-hailing operator says new fee will be rolled out later

Restrictions on Grab's ride-hailing service have been lifted, allowing the company to change its pricing policies and driver commission rates after a two-year freeze.

The operator is also free to charge an extra fee of about 30 cents for each ride in the coming months.

The Competition and Consumer Commission of Singapore (CCCS) had in September 2018 imposed a freeze on Grab's pricing algorithm and driver commission rate after the company's merger with ride-hailing rival Uber was found to have infringed Section 54 of the Competition Act.

The consumer watchdog yesterday said that it lifted restrictions following the introduction of a new point-to-point transport regulatory framework kicking in.

Grab, in response to news that restrictions were lifted, said it is committed to maintaining its current pricing structure and policies "for at least the next six months, given the Covid-19 situation".

But a new platform fee for its transport services will be rolled out later, said Mr Andrew Chan, managing director of transport for Grab Singapore.

He said this fee will help Grab to improve its safety features, cover operating costs and look after the welfare of its drivers in a sustainable manner. "This introduction of a platform fee will be the only change we will be making to our fares for the time being," said Mr Chan. More details about the fee will be announced at a later date.

He added that Grab will be prudent in its pricing structure and policies, and offer relevant services at a competitive price.

The consumer watchdog had imposed extensive restrictions on Grab after it infringed rules that prohibit mergers that could significantly reduce competition in any market here.

For example, Grab had to ensure its drivers were free to use any ride-hailing platform and remove Grab's exclusivity arrangements with any taxi fleet in Singapore.

The CCCS said in 2018 that the restrictions would be suspended if a competitor to Grab manages to secure 30 per cent or more of total rides matched in the ride-hailing platform service for one month.

But the CCCS said the start of a new point-to-point transport sector regulatory framework last month triggered the decision to lift the restrictions.

The consumer watchdog noted that there are a number of other licensed ride-hailing operators under the new framework, such as Gojek and Tada Mobility.

The framework also ensures that all licensed operators cannot prevent their drivers from driving for other operators, noted CCCS.

"The regulatory framework also ensures that P2P (point-to-point) fares are transparent and clearly communicated to commuters, while leaving fare levels to be determined by market forces," it added.

"CCCS will continue to work closely with the Land Transport Authority and Public Transport Council to ensure that the P2P sector remains open and contestable," the consumer watchdog said.

The National Private Hire Vehicles Association (NPHVA) in a Facebook post called for any fare adjustment or commission fees levied to be reasonable.

Meanwhile, Ms Yeo Wan Ling, director of the National Trades Union Congress, said the labour movement will support NPHVA in its discussions with Grab so as to balance the interests of commuters, drivers and company.

"In the long run, we want to ensure that our drivers' livelihood is not unfavourably affected by fare adjustments or changes."

A version of this article appeared in the print edition of The Straits Times on November 21, 2020, with the headline 'Grab free to change pricing policies, commission rates'. Print Edition | Subscribe