A new and cheaper commercial motor insurance plan has been launched to entice more people thinking of making extra pocket money to become part-time Grab app drivers.
Grab and AXA Insurance Singapore yesterday rolled out the policy based on distances covered in Grab rides, enabling drivers to save up to 30 per cent of insurance premium that they have to pay.
The first of its kind in the region, the plan is designed to help reduce operating costs for Grab drivers. A typical commercial policy can cost about $3,000 a year on the average.
Under the new policy, Grab drivers will pay a flat rate of 70 per cent of a base premium, and an extra S$0.06 for every kilometre up to 100 per cent cap of the base premium. Those with an existing policy will move to the new plan once the former expires.
Aiming to increase its pool of drivers especially during the peak-hour rush when there is a dire shortage of cabs and private-hire cars, Grab hopes its latest move would draw more to drive part-time. Already, over 40 per cent of Grab drivers are part-timers, clocking fewer than 10 hours a week.
Mr Lim Kell Jay (in photo below), Head of Grab Singapore, believes the new policy "will reduce cost barriers to entry" for new drivers and help grow the supply pool to meet demand.
"This is part of Grab's commitment to helping our drivers maintain sustainable livelihoods by managing operational costs such as insurance, rental, fuel and mobile data plans," he said.
Mr Alfred Cheong, 38, who was aware of the new plan before it was officially launched, signed up to be a part-time driver because it would save him 30 per cent of insurance premium.
The event rigger, who worked on contract basis, said: "I decided to become a Grab driver not because I needed extra cash immediately. I wanted to save more money in the bank, which would be useful for my retirement or when I need more cash in an emergency."
So far, he was quite happy with the "$300 to $400" that he had made each week after driving for three to four hours a day.
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Mrs Doina Palici-Chehab (above on the right), CEO of AXA Insurance Singapore, noted that the regular fixed insurance premium model had been a key obstacle especially for part-time drivers and those thinking of joining the industry.
"With flexi driving hours, paying a fixed insurance premium does not make economic sense for them," she said when explaining how the new pricing model was made attractive to newcomers.
The latest policy is part of Grab's plan for a comprehensive safety and insurance coverage, following its launch of free personal accident insurance for drivers and passengers in Southeast Asia in March.
The new policy covers all commercial trips for third-party liability including passengers and property damage.
Safety for drivers and passenger is what Grab and AXA continue to have in mind as both partners look into ways to offer incentives to encourage safe driving habits and formulate innovative insurance plans relevant to needs.
Apart from using telematic data from navigational devices in insurance calculation, they will also depend on it to study patterns on speed, braking and single out most congested days and lull periods. The information would help drivers plan better routes and Grab to incentivise safe driving.
The use of telematics in monitoring the speed of Grab drivers in Jakarta recently gave the company an opportunity to warn those who ignored speed limits. As a result, there was a 35 per cent drop in speeding.
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