Grab imposes $2 fee on users who excessively cancel bookings

PHOTO: The Straits Times

We've all cancelled a taxi/GrabCar/UberX booking at least once in our lives.

It's inevitable, given the unpredictability of life in the few minutes you spend waiting for your ride. Perhaps another viable option arrives before your driver does, or perhaps you have a last minute change in plans or destination.

But if you have made a cancellation in the last few days, you'll realise that there is something new. Grab sends an email to your registered email address with a counter on cancellations you've made. It looks something like this.

Photo: Internet screengrab / Grab

On January 5, Grab Singapore's blog released a announcement about a new cancellation fee for those who cancel bookings too often. According to the official release, the latest feature is part of their "ongoing effort to make driving and riding with [Grab] a better experience".

Rest assured that the fee does not come with every cancellation, but will kick in if there are more than 10 within a week. After which, $2 will be charged to the passenger's GrabPay account. As for Non-GrabPay passengers, they will need to enable GrabPay, otherwise they will not be able to make any further bookings.

Photo: HardwareZone

Grab promises to give sufficient notice in the form of warning notifications before this fees are deducted.

And it's not just passengers, Grab will also be measuring driver performance based on their cancellation rates, among others. Low ride cancellation rates will translate to incentives and perks for Grab drivers.

Underlying motivations

The range of private car options available for Singaporeans, ranging from taxi apps to Uber and Grab certainly gives users a lot of flexibility in terms of making (and cancelling) bookings afterwards.

But what many of us do not fully realise is that each time we cancel a booking (as drivers and passengers), it creates inconvenience for the other party. This comes in the form of loss of earnings for drivers already en-route, and a loss of trust for passengers waiting for their ride to arrive.

As noted by Grab, the cancellation threshold will be adjusted accordingly over time, with the main goal of encouraging people to make a booking and stick with it to create a "fairer platform for drivers and passengers".

GrabTaxi CEO wants to build Southeast Asia's greatest tech firm

  • Uber is the elephant in the room, and on the road, but GrabTaxi founder and chief executive Anthony Tan reckons being local will give his Singapore-based start-up the edge in Asia.
  • "There is a clear advantage of being local," said Tan. It's not just about relying on a local player to better understand local customers. Each of the four have experience dealing with the regulatory regimes in their home markets.
  • GrabTaxi has a record of working closely with governments; Tan said the company had permits to operate legally in Vietnam, the Philippines, and Singapore.
  • On GrabTaxi, drivers and passengers negotiate the terms of their trips directly with one another through the app, and the company takes a flat 20 per cent commission.
  • In December, GrabTaxi entered into a partnership with other ride-hailing apps - China's Didi Kuaidi, India's Ola and US-based Lyft - with a view to covering a broader market but with a local's expertise that Uber could struggle to match.
  • GrabTaxi has raised about $700 million in funding so far, from notable names such as Singapore's Temasek, China's Didi Kuaidi, Japan's Softbank, and Silicon Valley-based GGV Capital.
  • Most of the funding has so far gone into research and development, including enhancing the user experience of GrabTaxi's platform, as well as on hiring globally and initiatives to increase the customer base.
  • Tan is looking even further than the next office opening or funding round. He has a 50-year goal. "How can we build the greatest Southeast Asian tech company [the region] has ever seen?"

Their FAQ section clarifies any concerns that passengers may have.

1. Why do I have to add GrabPay as a payment option for cancellations?

It helps make the cancellation fee payment more seamless. Using GrabPay, passengers will also get an e-receipt with the fee reflected, ensuring transparency.

2. Are you profiting from the cancellation fees?

Absolutely not, this is not a profit-driven initiative. This is to create a fair marketplace for our drivers and passengers. It also lets us accurately predict demand for drivers so we can allocate rides more efficiently.

3. Will I be charged a cancellation fee if the wait time for the driver is too long?

We understand there are valid reasons for cancellation - plans (and the weather!) can change rapidly in Singapore. This is why our fee will not apply to every single cancellation, but only after the cancellation threshold has been exceeded.

We can all agree that when we are panicking about not getting a car, the idea that other app users are out there cancelling the ones they do get leaves us with a bad taste on our tongues.

So let's all try to be better passengers and respect the bookings we make.

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