Grab to raise fares by $1, says it's to improve drivers' earnings

SINGAPORE - Ride-hailing firm Grab will raise its fares by $1 starting next month to improve driver earnings  amid rising fuel and maintenance costs, it said.

With taxi and private-hire car ridership at just 55 per cent of pre-pandemic levels as a result of the Covid-19 phase two (heightened alert) measures, Grab said it will not collect commission on the additional $1 from June 1 to June 30.

This means drivers will get $1 more for every ride they complete with Grab for a month.

To help commuters adjust to the new fares and defray the added costs, Grab said it will offer $1 vouchers for peak hour rides from June 1 to June 14.

Each Grab commuter will get two vouchers per day, and can use them on weekdays from 7am to 9am and 5pm to 7pm,  as well as on weekends from 11am to 6pm.

There is a limit on the total number of vouchers that can be claimed in a day.

Grab said with this fare hike and its other support measures, an average driver could recover up to 50 per cent of earnings lost due to the current Covid-19 restrictions. This is not including any additional income from deliveries.

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This is the first time the firm is raising its base fare since 2017.

The hike will apply to all of Grab's transport services, except for its standard taxi booking service, its carpooling service GrabHitch and its GrabCoach service, Grab Singapore's managing director for transport Andrew Chan said in a message to drivers on Tuesday  morning (May 25).

Grab began charging a platform fee of 30 cents for rides booked through it in December last year. This came after the competition watchdog - the Competition and Consumer Commission of Singapore (CCCS) - lifted restrictions on it in November.

Grab said the latest fare hike comes after “deep discussions” with its drivers and tripartite partners, who gave feedback that the fares have not kept up with the cost of providing transport services on the firm's platform.

Mr Chan said that discussions about Grab’s fare structure have been going on for many years, even when the firm’s hands were tied due to the CCCS restrictions that were imposed in the wake of its merger with rival Uber in 2018.

“The pandemic situation as we see today is volatile and we know we cannot wait any longer,” he said in his message to drivers. 

“We believe this will help improve your earnings while balancing the price passengers are willing to pay.”

Besides the fare hike, Grab on Tuesday also rolled out a suite of support measures for drivers to help them with the tightened restrictions.

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This includes additional incentives for Grab drivers who complete delivery jobs in designated high-demand areas and fixed value cash rebates based on the total number of transport and delivery jobs that drivers complete during pre-designated hours. 

Eligible drivers who rent their vehicles from Grab's vehicle rental arm, GrabRentals, will also receive a rental rebate of up to $45 per week.

Grab said: “Phase two (heightened alert) and last year’s circuit breaker have taken place amid the backdrop of increasing costs for operating and maintaining a vehicle - including fuel, maintenance and repair costs - while fares on the Grab platform have remained constant since 2017. Collectively, these factors have a significant impact on drivers’ take-home earnings.

“The initiatives under this holistic programme thus aim to alleviate driver-partners’ immediate financial strain and improve their overall earnings for longer-term viability.

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