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New insurance to guard against price surges on ride-hailing apps when it rains

SINGAPORE — To deal with a big peeve among users of ride-hailing applications, a new insurance product promises protection against price surges for rides during wet weather.

SINGAPORE — To deal with a big peeve among users of ride-hailing applications, a new insurance product promises protection against price surges for rides during wet weather.

Called Droplet, the new product by insurer NTUC Income offers users up to 60 per cent of their fares or cancellation fees back if it was raining at the time of pick-up.

The product is now open to users who book a ride via ride-hailing app Grab, but will cover other similar apps by the year’s end, Income announced on Wednesday (Oct 24).

Insurance premiums are dynamic and will vary according to the probability of rain as forecast by the National Environment Agency. The product will cost between S$1 and S$9.60 a day.

A higher chance of rain will mean a steeper premium, Income’s chief operating officer Peter Tay told TODAY.

This means those who buy the product closer to the days when rain is forecast are likely to pay more compared with those who get it in advance.

Users must buy the product at least a day in advance of their journeys, and may make claims by submitting as many ride receipts as they please, capped at S$50 a day.

A typical journey from Ang Mo Kio Avenue 10 to Bartley Road, for instance, costs S$10 to S$12 on average for users of ride-hailing apps. This could go up to S$28 during wet weather, as the trips are subject to dynamic pricing, where fares climb when demand increases.

Mr Tay said that users covered under Droplet before the ride could get S$16.80 back.

To help users make an informed buying decision, the Droplet website makes available real-time weather forecasts.

Using robotic process automation technology, receipts can be verified quickly to ascertain the location of the booking and whether there was rain at the time.

Passengers, who can submit their claims via email by providing their ride receipts, have up to seven days to make their claims.

They will receive their payouts within three days of submission, via electronic-payment service PayNow.

Droplet was launched on Monday, and by 5pm on Wednesday, Mr Tay said that Income has sold 34 policies.

“With something as ubiquitous as rain and surge pricing, we expect Droplet to influence the way in which consumers use and embed such an insurance in their daily lives,” he added.

GETTING INSURANCE IN ADVANCE A ‘HASSLE’

While the insurer is hopeful the product will take off, commuters told TODAY that it would be “troublesome” to buy insurance in advance. Most of their rides are also taken on a whim.

Financial analyst Lee Pei Zi, 27, said that she will probably not buy the product because it is a “hassle”.

The probability of rain is “erratic and might not be accurately forecast” as well, she added.

If she does buy the policy, she might eventually not take the ride at all and the premium paid will be for nought.

In the event that prices surge for Grab rides, Ms Lee said that she will look for cheaper options such as taxis or public transport.

Business development professional Jeremy Koh, 26, said that very few commuters plan their rides.

“If they already know that they need a ride in the near future, there are already functions like GrabHitch, where they can book the rides early. The prices do not surge, too,” he said, referring to Grab’s carpooling service.

Mr Zac Chua, 27, founder of a snack company, said that the product is akin to “gambling or hedging against the weather”.

“People usually take Grab because they are in a hurry to get from point A to B. Where will they find the time to buy insurance?” he asked.  

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