New ride-hailing app promises zero commission fees, fair prices in latest market shake-up

SINGAPORE – A mobile application that aims to cut out the middleman between drivers and users could potentially turn the ride-hailing industry on its head again, even while experts warned that it would have to overcome major challenges such as recruiting sufficient drivers.

The Mass Vehicle Ledger (MVL) app, which will be launched by homegrown firm MVL in July, aims to create an ecosystem of players in the automobile industry. This includes drivers, rental car companies, mechanics, repair shops and even insurance companies.

By integrating the different parties, the app collects core data related to safety standards, accidents, repairs and other car-related transactions on a blockchain. This will in turn connect businesses, services, and people from the automobile industry.

Such data could potentially be sold to technology companies or government bodies, said MVL.

As drivers, service providers and riders are connected directly, this eliminates the commission fees that drivers have to pay. Currently, private-hire car drivers with ride-hailing giant Grab pay a 20 per cent fee.

Riders can request a trip from point to point on the app, and such services will be paid for via credit card.

MVL’s chief executive Kay Woo said it aims to attract 25 per cent of the total number of private-hire car drivers in the market, or about 12,000 drivers, to the platform by the end of the year.

One of MVL’s partners include Caring Fleet, a local transport company with about 28 vehicles and 30 drivers. They primarily provide transport for people with disabilities and limited mobility.

Two pricing systems are likely to be used, as he added: “One is a fixed-fare rate from point to point, especially in cases where users reserve a car and book a trip beforehand, while the other option will be metered pricing.”

He said that the fares might be priced similarly to that of existing ride-hailing companies such as Grab.

The MVL app is set to spice up a ride-hailing industry that will also welcome a new entrant, RydeX, next week. This development also comes as the Singapore authorities are reviewing its regulatory regime for the taxi and private-hire car industries, as the competition watchdog looks into the Grab-Uber deal.

Unlike other ride-hailing apps, the MVL app will allow riders and drivers to earn MVL points when they provide additional trip data, such as reviewing their trip, for example.

The MVL points can be converted into coins, which is a cryptocurrency that can be converted to cash or exchanged for goods and services at establishments that accept such currencies.

The crypto point system aims to incentivise users to be more transparent with their data, and drivers who provide good services will get more points, said Mr Woo.

MVL has raised US$16 million in funding and Mr Woo said part of it will be spent on operational costs for the app.

The firm is a subsidiary of easi6, a tech start-up headquartered in Seoul, South Korea. Easi6 has provided transport services to travel agencies and car rental companies in Asia. It also created a traffic app for the 2018 Winter Olympic Games in PyeongChang, South Korea.

EXPERTS POOH-POOH IDEA

While it is the first ride-hailing app here to incorporate blockchain technology, experts are not convinced that it will take off as they cited some major obstacles for the firm.

For one, amassing drivers and fleets of vehicles in the ecosystem may prove to be a challenge.

Urban transport expert Park Byung Joon from the Singapore University of Social Sciences (SUSS) said the absence of commission fees would be attractive to drivers, but that was not enough to convince them to sign up.

What would entice them, ultimately, would be the ease of finding commuters.

“Unless drivers know that, (even) if there’s no commission, (if) there are no bookings, that’s not good either,” he said.

Dr Park said the service would stand out only if it had better algorithms that matched commuters to drivers quickly, or paired drivers with the types of trips they prefer, such as longer-distance bookings.

In response, MVL said that its point system “incentivises” and encourages contribution to the system.

Mr Woo said: “Points are given out to every player that may be involved in the car’s journey. For example, it is not only drivers who can earn points, but the company they rented the car from will also be able to collect points.”

He added that the number of points that a rental company accumulates can be used as a gauge of their services, for example.

Getting users to understand cryptocurrencies is another obstacle that MVL could face.

Mr Woo said: “We definitely face a hurdle in familiarising and educating private-hire drivers.”

In addition, eliminating the middleman that provides the service could mean that drivers and riders have no assurance that they will get the service they expect.  

Transport economist Walter Theseira, who is also from SUSS, said ride-hailing platforms such as Grab can act on behalf of drivers and passengers when issues crop up, such as when customers do not show up for their rides.

Dr Theseira questioned whether MVL could provide the same levels of customer service.

He added: “People are going to use it, but the moment they run into a matter which they cannot resolve, and they’re expecting to get help from a third party – If they cannot get that help, they’re going to say, ‘well, this might have been cheaper, but now I’ve no assurance I can get the service I want.'”

Dr Theseira said it is key for any ride-hailing service to satisfy the basic needs of drivers, who want to earn a good living, as well as riders, who want safe and convenient rides. “It’s irrelevant how you do it, as long as they deliver that,” he added.

Addressing the concerns, Mr Woo told TODAY: “In the beginning, (when disputes arise), we expect to jump in more often. Because we have the data, we can review the trip history that can help us make a judgement (when mediating conflicts).”

Good reviews would garner more MVL points, thereby incentivising players in the ecosystem to provide services at fair prices.

While he admitted that it might be idealistic, Mr Woo said that “the ultimate goal is to create trust via positive reinforcement between service providers and consumers”.