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Homegrown player Ryde to take on Grab in new round of ride-hailing battle

SINGAPORE — Firing a fresh salvo in the battle for the Republic’s ride-hailing market, homegrown company Ryde will roll out its fixed-fare private-hire car service next Wednesday (May 2) with more than 5,000 drivers on its platform.

The new RydeX service is a scheduled service that only takes bookings in advance, said its founder and chief executive Terence Zou.

The new RydeX service is a scheduled service that only takes bookings in advance, said its founder and chief executive Terence Zou.

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SINGAPORE — Firing a fresh salvo in the battle for Singapore’s ride-hailing market, homegrown company Ryde will roll out its fixed-fare private-hire car service next Wednesday (May 2) with more than 5,000 drivers on its platform.

This will put Ryde, which began as a carpooling service in 2015, in a head-to-head battle with its larger rival Grab. The ride-hailing firm recently acquired Uber’s business in South-east Asia.

The new RydeX service, however, is a scheduled service that takes bookings only in advance, and not on-demand. Users can book a ride between 10 minutes and seven days in advance, the company announced at a media event on Thursday (April 26).

The average waiting time to be matched to a driver is about 20 minutes, said Ryde’s founder and chief executive Terence Zou.

Commuters will pay fixed fares, which include surcharges and tolls such as Electronic Road Pricing fees.

While there will be “no unexpected price surges”, fares may vary during peak periods based on a surge-pricing model where fares are higher during periods of strong demand. Surge prices are capped at S$100, said Mr Zou.

He estimated that RydeX fares will be 5 per cent lower than the market rate. For instance, a journey from Sengkang to Raffles Place will cost S$16 on RydeX, compared with S$22 on taxis, and S$18 on an undisclosed competitor.

Users can also tip drivers for good service via the app, with the money going directly to drivers without extra service fees imposed by the firm.

Drivers will pay a 10 per cent commission fee on bookings — lower than the 20 per cent that Grab levies on its private-hire car drivers.

“By lowering the driver’s commission rate to 10 per cent, the savings will be passed back to commuters in the form of lower fares, and to drivers in the form of higher earnings,” said Ryde.

RydeX will also allow users to request specific drivers, such as those whose cars they have taken before.

Calling RydeX’s launch a big milestone for the company, Mr Zou said: “Ultimately, we hope to serve our users better, by providing commuters with a cheaper alternative to get around, and drivers a way to make a decent living.”

He added that the company aims to have 15,000 private-hire car drivers on its platform in the next three months. It will launch an on-demand service when it has a “critical mass” of drivers, said Mr Zou.

The company said it has nearly 400,000 users. These users will also be able to book luxury cars via a new premium RydeExec travel option with drivers who have received high service ratings.

Mr Zou had said previously that the Grab-Uber deal — which will see Uber receive a 27.5 per cent stake in Grab — gave Ryde an “opportune time” to fill a gap in the market. The Singapore market needs at least two or three ride-hailing platforms, and competition will be good for firms, he had argued.

Following the announcement of Grab’s takeover on March 26, users and drivers had expressed concerns that the move would lead to a dominant player abusing its market power and bumping up prices.

On its part, Grab had pledged not to raise fares and drivers’ commission fees in the “short to medium term”, and also pointed to the availability of alternatives, including new entrants such as Ryde.

In the weeks after Uber’s retreat, news also emerged that Indonesian ride-hailing giant Go-Jek was planning to make its foray into Singapore.

Asked if Ryde had a target market share in mind, Mr Zou said a second player should secure, “in a steady state, 20 to 25 per cent” of the market.

RECRUITING ENOUGH DRIVERS IS KEY: EXPERTS

While customers want good-quality rides at the lowest possible cost, transport economist Walter Theseira said the biggest challenge for Ryde may be in delivering its service if it does not have enough drivers.

There was also the question of whether drivers looking to earn a decent living would have a sufficient stream of scheduled bookings so they could move on to the next ride in a relatively short time.

“If drivers can’t get enough trips per hour, and they feel they are not having enough earnings, it doesn’t really matter if you are offering them lower commissions,” said Dr Theseira, who is with the Singapore University of Social Sciences (SUSS).

On Ryde’s plan to attract a critical mass of drivers, Dr Theseira said wooing drivers was easy for firms if they have enough money to splash, as reflected in Grab and Uber’s case. The two companies doled out regular incentives to retain drivers and encourage them to take on a large number of bookings. But it is not clear if Ryde has the financial clout to do so, said Dr Theseira.

“It’s easy for a driver to… try you out, but if after one day or one week, they look at their earnings and they say ‘I’m not getting what I want’, they’re not going to stay,” he added.

When asked how the company planned to ramp up efforts to recruit drivers, Mr Zou said it would reach out to drivers via referral programmes, increased marketing and building a platform with “decent incentives and fares”.

Dr Park Byung Joon, an urban transport expert with SUSS, said that RydeX’s 5,000-strong driver base does not mean it has the same number of drivers on the road at any given time. “Unless they build up a critical mass, they are not going to be a threat yet,” he added.

Adding 10,000 more drivers over three months would be a “tall order” for the company, as drivers have the option of choosing between Ryde and Grab, he said.

Dr Park also questioned how a scheduled service would be different from pre-booking taxis. Pointing out that such a service would only work for certain trips, such as those who are bound for the airport, he added: “How am I supposed to know three days later, at 3pm, where do I want to go?”

DRIVER AVAILABILITY ‘MAKE OR BREAK FACTOR’: COMMUTERS

Fresh graduate Lawson Lau, 28, said he would be more inclined to use RydeX if he followed a routine schedule such as travelling to work every day.

While he said the scheduled service was an attractive option due to its certainty, he added: “However, if my transport plans are no longer routine, it would be difficult to consider Ryde.”

Commuter Low Jia Chai, 25, said the availability of drivers would be the “make-or-break” factor for him. “If it’s cheaper, and the driver availability is on par or better (than other platforms), I will try it for sure,” said the marketing executive.

However, he said he would not bother enduring long waits for fares that are 5 per cent cheaper. “For 20 per cent or more, then I will consider it,” added Mr Low.

Mr Zac Chua, founder of a local gourmet snack company, said he would use Ryde as it offered cheaper rides.

However, the 27-year-old added: “If I have a sudden meeting, I would not wait 20 minutes just to save 5 per cent.”

Agreeing, finance professional Darrell Lua, 27, said the rides he books on such platforms were usually last-minute decisions, but he said he would consider Ryde if he needs to get to and from the airport, for instance.

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