Grab to add $0.30 platform fee after competition watchdog drops restrictions

Grab to add $0.30 platform fee after competition watchdog drops restrictions
Grab will add a platform fee of about $0.30 to its ride hailing in the next few months.
PHOTO: The Straits Times

Grab will add a platform fee of about $0.30 to its ride hailing in the next few months, after a statement by the Competition and Consumer Commission of Singapore (CCCS) said it would lift previous restrictions imposed on the ride-hailing firm.

The ride-hailing operator in July submitted an application to the commission to impose a platform fee for its ride-hailing services in Singapore. The commission will no longer issue a decision for this, CCCS said on Friday morning.

This introduction of a platform fee will be "the only change" Grab will be making to its fares... for at least the next six months, said Andrew Chan, managing director for transport at Grab Singapore. Other ride-hailing platforms such as Gojek and Ryde currently have platform fees of up to $0.70.


After Grab's merger with Uber, CCCS in September 2018 had required the former to maintain its pre-merger pricing, pricing policies and product options, as well as remove all exclusivity obligations on drivers and taxi fleets, for fear of a "substantial lessening of competition" in the ride-hailing market.

However, following the implementation of Singapore's new point-to-point (P2P) transport regulatory framework on Oct 30, more operators such as Gojek, ComfortDelgro and Tada Mobility too have been awarded ride-hail service operator licences, CCCS said.

The new regulations will ensure that all licensed operators cannot prevent their drivers from driving for other operators. It will also ensure that P2P fares are transparent and clearly communicated to commuters, while leaving fare levels to be determined by market forces.

"With a sectoral regulatory framework now in place, CCCS considers it timely to release the directions imposed on Grab as the issues identified are more appropriately considered and addressed within the context of the sectoral regulatory framework," the commission said.


Mr Chan noted: "The platform fee will enable us to maintain and improve safety measures, cover other relevant operating costs as well as look after our driver-partners' welfare sustainably… We will be prudent with our pricing structure and policies."

One-third of its platform fee will be allocated to support its drivers through welfare benefits and programmes, Grab said.

“We also welcome the decision as it will help us accelerate the speed of innovation to introduce new trials and to develop more solutions to cater to our passengers’ ever-evolving needs in the future,” said Grab.

The National Private Hire Vehicles Association on Friday said that its main concern is for drivers' income to be fair. Any fare adjustment or commission fees levied should also be "reasonable" and "better the livelihoods of drivers".

Yeo Wan Ling, director of NTUC's small and medium-sized enterprise arm, said: "In the long run, we want to ensure that our drivers' livelihood is not unfavourably affected by fare adjustments or changes.

"We look forward to working closely with Grab and all parties so that our drivers can be stakeholders and true 'driver partners' of Grab."

This article was first published in The Business Times. Permission required for reproduction.

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