Grab denies changing fare structure amid price fluctuations

 

Grab Malaysia has responded to criticisms regarding its recent price fluctuations for the rides.

The e-hailing operator denied that it has made any changes to the fare structure.

“Grab adopts a dynamic pricing model to ensure our passengers get a ride when they need one and our driver-partners are compensated fairly for their time and effort.

“When there are more people booking a ride than the number of drivers available in an area, fares will ‘surge’ or go up to encourage more drivers to head to where passengers are,” it said in a statement today.

The app also attributed its price fluctuations to a reduced number of Grab drivers on the road who are able to accept the sharp increase in ride demand from passengers.

They noted that as of mid-May this year, the number of driver-partners on the platform is still less than 70 percent of what it was during pre-pandemic.

Grab claimed that many driver-partners became inactive over the pandemic due to Covid-19 concerns and a then-lack of demand from passengers.

They also noted that the easing of Covid-19 standard operating procedures coupled with the recent festive periods has boosted ride bookings on the platform.

Grab claimed that another factor was barriers to entries for new drivers on the app.

“Barriers to entry result in a slower response time for new drivers to be onboarded to meet the sharp increase in demand.

“New drivers are required to meet various regulatory requirements, such as six hours of training, exams at driving schools, vehicle inspection, purchasing insurance, and collating and submitting documents to various government agencies for processing.

“This places a structural limit to the speed at which new driver-partners could come on board to benefit from the additional income that has been created for them.

“Finally, we have observed a large increase in traffic congestion. This increases the cost (in time and fuel) to serve each ride, while simultaneously reducing the effective capacity of drivers to serve more rides,” it added.

“While we strive to bring more driver-partners on board, there is a mismatch as the increase in demand for rides is outpacing the growth in the number of drivers.

“In the long term, we remain steadfast in our commitment to providing affordable rides for our community. However, in the short term, we will endeavour to meet all demand.”

Solutions

According to Grab, it has implemented a number of measures to increase the supply of drivers to serve its passengers’ rides.

This includes:

• Increasing incentives for driver-partners to get back on the road during peak hours

• Subsidising up to 100 percent of total driver-partner regulatory compliance cost

• Offering referral bonuses up to RM300 to existing driver-partners to refer and help onboard new driver-partners

• Offering a bonus of up to RM1,000 to any Malaysians who get onboarded as a driver-partner on our platform

• Assisting new drivers to navigate through various regulatory processes such as medical checks, training, exams, vehicle inspection and licensing

Grab also recommended that users plan their trips ahead of time and book earlier than usual to ensure they are able to secure a driver.

“(Passengers can) book their ride earlier and be ready when the driver arrives, especially if they have a flight to catch or need to get to an important meeting.

“Please do not cancel a ride if they manage to get one even though the waiting time may seem unusually long.

“They can also set an alert via the 'Fare Alert Notification' feature in their Grab app. They will be notified if the fare drops within the next 15 minutes,” it said.

Grab expressed its hopes that the supply and demand imbalance will be transient.

Over the last week, unhappy passengers have reported a recent price hike for their usual Grab rides - up nearly double the rate during regular hours.

This has resulted in the daily commute to work costing almost twice as much for many using the e-hailing service.

Aside from the hike in charge for regular hours, it was also noted by some passengers who pointed out on social media how Grab has become "stingy" in awarding its reward points.

Today, Transport Minister Wee Ka Siong said that the government does not regulate base fares set by e-hailing operators.

In a statement, he said e-hailing operators are allowed to set two charges - a base fare and a surcharge.

His statement does not indicate the government is making any regulatory changes at the moment.

Wee promised that the government will continue to monitor the situation to "ensure fairness" and prevent an "undue burden on consumers". - Mkini