Dynamic pricing less than attractive for cabbies

SINGAPORE — After trying out the new JustGrab service launched for beta-testing a week ago, cabbies said they would be more judicious about accepting such bookings, noting that they are less profitable.

While a handful acknowledged the new service could spare them from having to cruise empty for passengers, many said they would take JustGrab bookings only during periods with high surge pricing, such as during a major train breakdown.

Five taxi operators — SMRT Taxis, Prime Taxi, Premier Taxis, Trans-Cab and HDT Singapore Taxi — fully rolled out JustGrab yesterday, allowing passengers to pick fixed fares over metered fares. The option by ride-hailing app Grab is subject to surge pricing, where fares are determined by demand for and supply of rides.

Checks yesterday showed that a JustGrab ride from Bishan to Havelock Road cost S$12, S$22 and S$13 at 7.30am, 8.30am and 9.30am, respectively. In contrast, metered fares were estimated to be between S$15 and S$20 during the same period. In the evening, a trip between One Marina Boulevard and Choa Chu Kang was S$41 on JustGrab, and projected to be between S$26 and S$34 for metered fare.

Passengers who tried JustGrab yesterday said their fares were more affordable, in comparison with GrabCar. Consultant Ling Low got a ride within 10 seconds of booking and paid S$7 to go from Raffles Place to Suntec City in the afternoon. “I used to wait longer before I could find a ride. The fixed fare is also great — it is comparable to what I usually pay,” Ms Low, 26, said.

Trans-Cab driver Desmond Lee, 56, who took two JustGrab bookings, said the fixed fare was lower by S$1 to S$2. While the fare difference was acceptable, he felt that short trips amounting to S$6, for example, are not worth the trouble after taking into account the 10 per cent in commissions to Grab.

SMRT Taxis cabbie C K Lek was adamant about picking passengers the “traditional” way — by cruising and waiting at taxi stands — given that Grab’s incentives were tied to acceptance and cancellation rates. “I prefer not to be tied down by these things,” he said.

Trans-Cab driver Anthony Hung, 59, took three to four bookings during the morning rush hour yesterday. Noting that a trip from Sembawang to Outram cost S$20 on JustGrab, compared to S$26 on the meter, he said: “It is big savings for commuters, but not so for drivers.”

Agreeing, Mr Daud Baharom, a Premier Taxis cabbie, said bookings are preferred since they save him time driving around looking for passengers.

Singapore Management University transport expert Terence Fan said taxi drivers were likely to give JustGrab a try initially. “But when they sit down and do the math, they might wonder if it is worthwhile to be on (JustGrab) all the time. During peak hours, they may not need it unless there is a major disruption or a downpour,” Dr Fan said.

Singapore University of Social Sciences economist Walter Theseira said weekday demand may not be enough to cause prices to surge: “We have to give it some time to shake out — go through high demand, like Friday night, or when there is rain and all that.”