GrabCar ups ante in tussle with rival Uber for drivers

Local car-hire firm offers $1,550 a week as incentive on top of the fare earnings

Car-hire app GrabCar Singapore has ramped up its fight with rival Uber by dangling its biggest cash reward yet to prospective drivers, The Straits Times has learnt.

On Monday, it launched an incentive programme promising $1,550 a week on top of their fare earnings - the most since the service was launched a year ago.

To earn this, a driver must pick up 100 different passengers a week and make 60 trips during peak hours. The reward comprises $1,200 in cash and $350 in "credit".

Drivers must top up credits in their GrabCar accounts to use the app, from which the company deducts commission.

GrabTaxi, which is based in Singapore and runs the GrabCar service, has raised more than US$340 million (S$464 million) in investment in the last year.

Mr Lim Kell Jay, head of GrabCar Singapore, declined to reveal how much money it has paid in incentives so far but said it has helped to build the firm's network of drivers.

He said: "All start-ups go through a phase of market development and growth... We are blessed to have received funding that provides us with more options and means to accelerate our growth. These incentives will not last forever but they will remain for as long as is necessary. "

GrabCar's bid to grow its market share has met with competition from San Francisco-based Uber, which set up here in 2013 and launched a guaranteed earnings scheme a few months ago.

If an Uber driver makes less than the guaranteed amount in fares during peak hours, the company tops up the difference - provided a driver fulfils conditions like staying online during peak hours and accepting almost all bookings. The guaranteed amount ranges from $27 to $32.

But while drivers are benefiting from the fight between Uber and GrabCar, some said that should the incentives end, they may not be able to sustain their livelihood.

Neither Uber nor GrabCar have revealed their driver numbers or details of their profits in Singapore.

Mr Tan Siau Kiong, 59, has worked for both companies and about 70 per cent of his $1,800 weekly gross earnings are from incentives. He makes around $540 from fares but this is not enough to pay for rental costs and petrol, which add up to $800. "Without incentives, it's very hard," he added.

Mr Ken Gwee, 28, who has also worked for both, said their incentive schemes pay roughly the same amount, though drivers can work for one app only. "I highly doubt that incentives will remain as generous as they are now," he said. "GrabCar has just entered the market, and is aggressively promoting its services while trying to entice a larger pool of drivers away from Uber."

A version of this article appeared in the print edition of The Straits Times on July 18, 2015, with the headline 'GrabCar ups ante in tussle with rival Uber for drivers'. Print Edition | Subscribe