Grab seeks to impose 30-cent platform fee on ride-hailing services; competition watchdog studying application

• Grab hopes to impose a 30-cent platform fee for every journey on its ride-hailing services
• The funds will go towards maintaining and improving safety features and driver protection, it said
• The Competition and Consumer Commission of Singapore  (CCCS) has to approve the move first
• CCCS is seeking public feedback on the move

SINGAPORE — Grab plans to impose a 30-cent platform fee on its ride-hailing services here, so that it can maintain and improve safety measures and cover relevant operating costs, its managing director for transport Andrew Chan said. 

To do so, Grab has made a request to the Competition and Consumer Commission of Singapore (CCCS) for the inclusion of the fee — which will be 32 cents with the Goods and Services Tax — for every ride. 

“The platform fee will enable us to maintain and improve safety measures, cover other relevant operating costs as well as look after our driver-partners’ welfare sustainably,” Mr Chan said on Tuesday (July 28). 

Examples of these safety measures include number-masking, the emergency button and driver identity verification, which will “help to safeguard users’ safety and security, as well as prevent fraud”, he added. 

In addition, other measures such as driver telematics to warn of speeding and heat-maps to show popular areas will ensure the well-being and livelihoods of drivers on the road. 

If the platform fee is approved, Mr Chan said that Grab will commit one-third of the fee received to drivers’ welfare by: 

• Doubling the benefit coverage of accident insurance for driver-partners 

• Having a training allowance to help driver-partners upskill and reskill

• Extending and increasing benefit coverage of a prolonged medical leave insurance to all driver-partners 

• Increasing Grab’s contribution to driver-partners' Central Porvident Fund's MediSave account through the GrabCar MediSave Match Programme.

“We hope to seek favourable responses from our driver-partners and passengers through this public consultation process, and look forward to providing an even more enjoyable ride experience that adds value to their everyday lives,” Mr Chan said. 

PUBLIC FEEDBACK 

CCCS said in a media statement on Tuesday that it is seeking public feedback on Grab’s application to impose this fee. 

Grab has to ask for approval from CCCS before introducing the fee as it is bound by an earlier decision by the watchdog, which followed its deal with Uber to buy over the latter’s Southeast Asian business for a 27.5 per cent stake in Grab in return.

Soon after the two firms announced this acquisition, CCCS imposed more than S$13 million in financial penalties on both of them, saying that the deal had substantially reduced competition and infringed the Competition Act.

CCCS had said at the time that the financial penalties were to "deter completed, irreversible mergers that harm competition".

Under the CCCS decision, Grab is also required to maintain its pre-transaction pricing, pricing policies and product options — including driver commission rates and structures — for all its products in the ride-hailing platform services market. 

Consequently, Grab is not allowed to change its pre-transaction prices or products without prior approval from CCCS.

However, Grab may still apply to CCCS to vary or remove the directions of the infringement decision, the commission said, adding that Grab had done so in the hopes of being able to introduce the 30-cent platform fee. 

WHAT ARE CCCS’ CONSIDERATIONS? 

In assessing Grab’s application, CCCS said that it will take into consideration the following factors: 

• If Grab should be allowed to recover the investments that it claims to have made into passenger safety and driver benefits

• What should be the relevant timeframe for assessing these additional investments claimed by Grab

• What nature and types of investments into passenger safety and driver benefits should be taken into account

• Whether Grab is able to provide evidence to substantiate the investments it claims to have made into passenger safety and driver benefits

• Whether Grab is able to adequately substantiate its claims that a third of the funds collected through the platform fee will be committed to providing benefits for driver welfare

“CCCS is seeking feedback to assist in its assessment of Grab’s application. Following the public consultation, CCCS will make a decision on the application,” it said. 

The closing date for submission of feedback to CCCS is at 5pm on Aug 11. More information on the consultation can be found on CCCS' website.