SINGAPORE - Four months after the Land Transport Authority (LTA) announced it was looking into trying out on-demand bus services, Grab has started trials for such a service in Punggol.

The new service - GrabShuttle Plus - was launched on Wednesday (Nov 8).

After making a booking on their smartphone, users can expect a shuttle bus to arrive within about five to 10 minutes, and take them anywhere between two bus stops in Punggol.

GrabShuttle Plus rides cost $1.20 each and are available between 6am and 10pm.

It differs from the previously launched GrabShuttle, a collaboration with the Government Technology Agency of Singapore, which operates only on fixed routes and timings.

The new service comes after the LTA said in August it would begin trials of "on-demand, dynamically routed" bus services in the second half of next year, beginning in areas with low demand during off-peak hours.

The head of GrabShuttle Singapore, Mr James Ong, noted that Grab is taking part in a tender for the LTA's on-demand buses. Its Punggol trial, he added, would help it "garner insights to deliver a superior service if selected".

GrabShuttle Plus complements the broader public transport network, he said.

"We share the same belief with the LTA that dynamic bus services can provide a better commuting experience and optimise resources and operating costs," he added.

Mr Ong described Punggol as a "natural testbed" for the new service, noting that its residents are regular Grab users.

While the trial may later include other neighbourhoods, he said Grab is currently focused on getting more people to use the service so as to study commuting patterns for dynamic bus services.

The new GrabShuttle Plus app, which is available on iOS and Android, is powered by Canadian technology start-up RideCo, which offers similar services in Ontario.

Mr Ong said RideCo provided a platform that would allow Grab to study user behaviour with "minimal technological enhancements" on its part.

"We are going global by partnering with local transportation operators," said RideCo co-founder Prem Gururajan, adding that Grab's scale and local market knowledge made it a "perfect partner".

He said that RideCo is looking to expand its reach in South-east Asia, and expects to launch more services in the region in the coming months.

Observers say they are not surprised by Grab's latest service.

On-demand buses are like ride-sharing services GrabShare or Uberpool "on steroids", said Singapore University of Social Sciences senior lecturer Park Byung Joon, who specialises in urban transport.

Dr Lee Der Horng, a transport researcher with the National University of Singapore, said with its experience in offering ride-hailing services, Grab has more experience in dealing with big data as well as handling commuter demand.

Having private firms offer such services reduces any potential revenue risk to the Government, he added.

However, Dr Park noted that Grab, being a commercial enterprise, must see whether on-demand buses have the potential to turn a profit before deciding if it wants to continue offering the service.

Commuter Azmi Mohamed, 35, said on-demand bus services are not an attractive replacement for feeder bus services, which are already "very regular" and inexpensive, with fares capped at 77 cents per trip.

But the IT specialist noted that such on-demand bus services could be a boon when travelling between places that are nearby, but which are not served by a direct bus service.

"I can see a use for a services like GrabShuttle Plus," he said.