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For example, Mr Lim Wei Jun, a private-hire driver who has used several platforms including Grab since 2015, said that it is typical for drivers to be travelling for eight minutes to pick up a passenger located far away.
For a relatively short trip with a S$10 fare, there is “no point” spending eight minutes to save S$2 from not being charged the typical 20 per cent commission, for instance, the 35-year-old added.
“But if a customer is paying a S$50 fare to a high demand area, even if you spend 10 minutes travelling to him, you also won’t cancel.”
Another common point raised by the drivers was that when they are matched with distant passengers, these passengers tended to cancel while the drivers are already enroute. This factor was not taken into account by the private-hire platform, drivers said.
Mr Sukh Sagar Yadav, who has been driving for Grab for about three years, said that he is reluctant to pick up far away passengers because it is common for commuters to cancel their booking on the basis that the driver is taking a long time to arrive.
“They see that the driver will take eight, 10 minutes to arrive, then they try to book with other apps and compare,” the 68-year-old said. “When they find a much nearer driver a few minutes later, they will cancel. By then, we are on the way, maybe on the expressway already.”
PREFER NEARBY TRIPS TO MEET TIERED INCENTIVES
Some drivers also voiced their concerns that the changes lead to higher fees for those who aim to achieve Grab’s other incentives, which are structured around fulfilling a certain number of trips over a period of time.
A 60-year-old driver who wanted to be known only as Jack, said that to maintain one’s “driver tier”, drivers have to meet daily and monthly incentive targets, as well as to hit a number of trips each quarter.
Higher-tier drivers get benefits such as priority job allocations and better fuel discount than other drivers, which can be significant.
Therefore, the existing structure incentivises drivers who want to complete each trip quickly, as opposed to taking more time to pick up further passengers for rides of longer distances, the Grab driver of about five years added.
However, based on the variable fee charged during the pilots, these drivers could ultimately incur a higher Grab fee because the company might charge more than the flat 20.18 per cent commission currently for nearby passengers.
Speaking to TODAY, several drivers said that the bulk of their daily trips typically involve nearby pick-ups.
A 60-year-old driver who wanted to be known only as Tan KY, said: “I make about 20 plus trips a day. It may vary, but normally on weekdays, I get one or two farther pick-ups.”
A blog post on Grab’s website dated Aug 14 said that the company does not always assign the nearest driver to passengers.
Instead, more than 40 factors are weighed to get the “best match” between available drivers and passengers, including estimated time of arrival and the driver’s preference based on the types of bookings they tend to accept and decline.
Drivers told TODAY that what adds to the uncertainty surrounding the new fare structure is the lack of clarity and details about how the actual variable charge will be implemented, as well as what distance would be considered near or far.
A private-hire driver of multiple platforms who wanted to be known only as Mr Raj said that the present S$3 bonus that Grab gives to drivers for completing pick-ups located 3km or more clearly spells out how they can earn such perks.
This is similar to that offered by rival platform Gojek, the 49-year-old added.
OTHER INDUSTRY PLAYERS REACT
The revision to Grab’s driver commission came at the heel of Gojek lowering its driver commission from 15 per cent to 10 per cent.
Asked for its comments, Gojek told TODAY that the firm constantly make adjustments based on feedback from their driver-partners.
“Most recently, we also improved our algorithms to reduce far pick-ups, which has led to a 15 per cent reduction in average pick-up distance in October as compared to September, benefitting both driver-partners and customers,” it added.
Another ride hailing platform, Tada, does not charge any commission for its drivers. Instead, it levies a platform fee of S$0.55 or S$0.75, depending on the fare.
Asked how it ensures that drivers are compensated for the effort taken to pick up a passenger, Tada said that ensuring fair compensation is a crucial aspect of its business, and that it is committed in ensuring that drivers retain a significant portion of their earnings.
This entails striking “a fair balance between the platform’s sustainability and driver compensation”, it added.
“Drivers can see the fare of an incoming job and their distance from the pick-up, before deciding whether to accept the job. Drivers are not penalised if they do not accept the jobs surfaced to them.”
Tada also said that it conducts regular reviews of its fare structure.
Ryde, a ride-hailing platform that charges a S$0.50 platform fee and 10 per cent commission, declined to comment when contacted.
TODAY has reached out to Grab for comment.
This article was originally published in TODAY.
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