Tussle between Comfort, Grab shifts up a gear

Mr Luen Chi Keung, who quit ComfortDelGro to join Grab partner SMRT a month ago, said he now gets time to have family dinners.
Mr Luen Chi Keung, who quit ComfortDelGro to join Grab partner SMRT a month ago, said he now gets time to have family dinners.ST PHOTO: WONG KWAI CHOW

Drivers and commuters stand to gain, but not if it leads to price war

It began with a trickle of offerings - a smattering of discounts and extra perks if cabbies got their friends to join Grab. But as the ride-hailing app firm grew its fleet to include 10,000 taxis - bringing its total stable size to about 40,000 cars, including private-hire drivers - it came up against one roadblock: ComfortDelGro.

The largest taxi operator here was the only holdout after five others - SMRT, Trans-Cab, Premier, Prime and HDT Singapore Taxi - announced a partnership with Grab in March. The move was significant, introducing upfront fares and dynamic pricing for cabs here.

In August, ComfortDelGro said it might tie up with Grab's American rival, Uber.

Armed with more than $3 billion from its latest round of funding, Grab then launched its most aggressive promotion to date last month.

By offering ferocious rental discounts for six months, it managed to lure about 3,000 of ComfortDelGro's some 15,000 cabbies. The offers were: $50-a-day rental, or about $1,500 a month, to join one of its partner taxi firms, or up to $1,688 a month to sign up as a driver with its private-hire service, GrabCar.

Most of those who made the switch signed up as private-hire drivers, a spokesman for Grab said.

Observers said if the Comfort-Uber deal goes through, the consolidated fleet of about 30,000 cars will be a force to reckon with against Grab's 40,000.

ComfortDelGro did not respond to repeated requests for updates on the possible Comfort-Uber deal.

National Taxi Association adviser Ang Hin Kee said he hopes to see ComfortDelGro come up with similarly competitive measures. "They don't have to offer the same type of benefits - it could be welfare benefits, or partial CPF (Central Provident Fund) contributions, or hourly rental instead of daily ones," he said. "At the end of the day, having more choices is a good thing for our drivers."

 

For cabbies, Grab seems to offer better pay, motivation and hours - for now.

Mr Poh Chai Thiam, 54, who joined Grab three weeks ago, thinks he can take home about $4,000 a month after deducting rental, a 20 per cent commission paid to Grab and petrol costs. This would be about $1,500 more than when he was at ComfortDelGro previously.

Former ComfortDelGro limousine driver Luen Chi Keung, 63, who made the switch a month ago, said that while his pay is about the same, he can now afford to walk his dog daily, as well as have family dinners.

But cabby Nelson Tan, 57, is sticking with ComfortDelGro, having tried Grab and Uber for six months each. He found that the high volume of calls and incentive goals made it more stressful. "Grab is here to stay but it's really for younger drivers. But it's okay, because taxis still have their own customer base. Our customers are those who have encountered incompetent Grab and Uber drivers, who don't know routes or are rude," he said.

National University of Singapore transport researcher Lee Der Horng predicts there will eventually be a sole operator. And it would be Grab or Comfort, should the Comfort-Uber deal go through. Said Dr Lee: "If it does, a price war will break out and that's not sustainable. So if everyone dies, then who looks after drivers or the consumers?"

A version of this article appeared in the print edition of The Sunday Times on October 22, 2017, with the headline 'Tussle between Comfort, Grab shifts up a gear'. Print Edition | Subscribe