Grab cuts fee for JustGrab taxi drivers for short trips, but raises commission for higher fares

SINGAPORE — From Monday (March 5), taxi drivers who pick up bookings on the JustGrab platform will pay less to the ride-sharing firm if the fares are below S$10.

Grab first announced the revision to its commission fee for cabbies in a mailer sent out to the taxi drivers on Friday, which will see the levy for JustGrab rides reduced from 10 per cent to 3 per cent for fares below S$10. However, the fees for fares that are S$11 and above will be increased to 12 per cent.

In response to queries from TODAY, Mr Melvin Vu, Head of GrabTaxi Singapore, said: “We’ve revised our levy to better support taxi driver-partners as they pay more than two times higher in taxi rental than private-hire vehicles.”

“By setting a different levy for trips above and below S$10 in fares, we believe it’ll help drivers take home more income to cover their taxi rental costs.”

Launched in March last year, JustGrab combines cabbies from five taxi operators — Trans-Cab, SMRT Taxis, Prime Taxi, Premier Taxis and HDT Singapore Taxi — and private-hire cars on the same platform.

Grab drivers will not see any changes to their levy amounts, which is currently at 20 per cent.

Dr Walter Theseira, Singapore University of Social Sciences’ (SUSS) transport economist said that the changes were likely due to Grab seeing “a need to encourage drivers to be available for more short distance jobs.”

The adjustment in levies comes more than a month after ride-hailing firm Uber and taxi operator ComfortDelgro rolled out a similar service.

Under the UberFlash service, Uber takes a 10 per cent cut on bookings taken up by ComfortDelGro cabbies, less than the 20 per cent commission it levies on Uber drivers.

The tiered levy structure drew a lacklustre response from taxi drivers on the JustGrab platform. Most of them said that the reduced commission fees were not much of an incentive to pick up shorter trips.

Mr Ho Ze Kai, 35, an SMRT taxi driver said: “Of course, the 7 per cent reduction in levy for short trips is a bonus if there aren’t long trips available.”

However, Mr Ho said that taxi drivers are more concerned about picking up bookings near the Central Business District, as the fares are usually higher due to surge pricing.

Ha added: “It won’t really incentivise me to do shorter trips. I will still take jobs (that work) to my advantage. For example, in the evening when I’m driving in a residential area, I’ll only choose jobs that bring me to the city or somewhere near the city.”

Another driver, who declined to be named, said: “I will still drive back to town even if I have no passengers in my car to get a surge fare rather than take S$6 to S$8 dollar jobs in a neighbourhood estate.”

Dr Theseira said it is too early to tell if Grab’s levy changes will be able to compete with what Uber is offering. He said: “I wouldn’t say this amounts to a discount over (UberFlash’s rate) just yet. There are plenty of ways ride-sharing companies compete for drivers including incentives and rental rebates, so a driver would look at the overall package and not necessarily just the levy rate.”