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Feedback sought on Grab's proposed extra fee

Feedback sought on Grab's proposed extra fee

Source: Straits Times
Article Date: 29 Jul 2020
Author: Jessie Lim & Ng Keng Gene

Grab seek to charge passengers an extra 32 cents for each ride here. It said the "platform fee" will enable it to maintain and enhance safety measures and go towards covering operating costs.

Grab is seeking to charge passengers an extra 32 cents for each ride here as a "platform fee", and the Competition and Consumer Commission of Singapore (CCCS) said it is seeking public feedback on the application.

The ride-hailing operator said the fee will enable it to maintain and enhance safety measures and go towards covering operating costs.

Its move to introduce a fee has to go through CCCS under directions set in September 2018 following a Grab-Uber merger in which Uber sold its South-east Asian business to Grab for a 27.5 per cent stake in the latter.

The directions, which included a requirement for Grab to maintain its pre-merger pricing, pricing policies and product options across its products, were intended by CCCS to lessen the impact of the merger on drivers and riders, open up the market and to level the playing field for new entrants.

CCCS said in 2018 it will suspend the directions indefinitely if a competitor attains 30 per cent or more of total rides matched across ride-hailing platform services for one month. All directions would be released unconditionally if a competitor attains the same 30 per cent market share for six consecutive calendar months.

In a statement yesterday, CCCS said Grab had submitted that the proposed platform fee conforms to norms within the ride-hailing industry and one-third of the funds collected as a result of the fee will go towards providing Grab drivers with more welfare benefits.

In March, Gojek, which entered the Singapore market in November 2018, introduced a 70-cent surcharge on trips booked through its platform, which the firm said would fund improvements to its service.

Transport economist Walter Theseira said experimenting with prices out of business necessity is not unusual for ride-hailing operators, and that Grab would likely have changed its fare structure in response to the competitive situation earlier if not for the CCCS directions.

Mr Ang Hin Kee, the executive adviser to the National Taxi Association and the National Private Hire Vehicles Association, said he hoped that beyond considering Grab's application to introduce platform fees, the competition watchdog would also consider the directions in their entirety, and how they might affect private-hire drivers amid the pandemic.

He said: "Ensuring that the market is competitive is a good starting point, but the Covid-19 context is unlike 2018 (when the directions were issued) - even big players (like Grab) are facing a shrinking market size. This has a big impact on drivers and the viability of the operators."

Mr Ang added that while drivers are primarily concerned with the commissions they pay to ride-hailing operators, any initiative that might increase riding costs would also worry drivers, as commuters might go for cheaper alternatives.

CCCS said it will consider public feedback in its assessment of Grab's application, including factors such as cost recovery and Grab's investment in passenger safety and driver welfare.

More information on the public consultation is available on CCCS' website.

Those wishing to give feedback can e-mail [email protected] by Aug 11.

Source: Straits Times © Singapore Press Holdings Ltd. Permission required for reproduction.

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