New service GrabCar Plus to be introduced, but riders have to pay 20% more

SINGAPORE — From April, ride-sharing platform Grab will offer a new service that aims to provide better service to customers who are willing to pay more — 20 per cent more to be exact. This “deluxe service” from higher rated drivers with newer cars will be called GrabCar Plus.

Grab has begun canvassing for drivers to sign up for the service, and it sent out emails to drivers earlier this week offering more incentives. According to information on their website which was posted on Wednesday (Jan 31), these include earning up to 20 per cent more in fares, and the option of not taking any GrabShare bookings.

Mr Andrew Chan, Head of GrabCar Singapore, told TODAY that the new GrabCar Plus service was created based on feedback from passengers on the type of experiences they were looking for. The new option, however, will not replace GrabCar Premium, which offers riders the option of commuting in a luxury car.

Mr Chan said: “GrabCar Plus is a new deluxe service with a focus on excellent service and newer cars.”

The ride-sharing firm will also be discontinuing its GrabCar service from April, and private hire drivers will continue to receive jobs from other services such as JustGrab, GrabShare, GrabFamily and GrabCar Premium, he added.

The new GrabPlus scheme, however, was met with scepticism from drivers, with some saying the passing criteria is too tough to meet.

For GrabCar economy drivers, only certain models of cars are allowed on the new service, and the vehicles cannot be older than three years. GrabCar Premium drivers, who can also sign up for the scheme, must have vehicles that are not older than five years.

Drivers who opt in for GrabCar Plus will have their first 50 rides reviewed, and they will be assessed on service levels and the condition of their cars before they can officially join the service.

The passing criteria includes maintaining an acceptance rate of 90 per cent, and a driver rating of 4.8 out of 5.

According to its website, drivers will be removed from GrabCar Plus “once more than two per cent” of their trips receive negative passenger comments, though the comments are subject to review.

Grab driver Johnny Tan, 42, said: “The criteria is a high bar to meet. The strict criteria reduces the odds of drivers like us enjoying the incentives.

“The scheme also seems to be filtering out drivers, especially drivers with personal vehicles that are older than three years, and relegating them to compete with taxis on JustGrab.”

Mr Tan, who has been a private-hire driver for more than a year, added that he is sceptical of GrabCar Plus, as it appeared that “there would be a string of conditions attached, making it difficult to hit the incentives”, whenever Grab introduced a new incentive scheme.

Others like Mr Derrick Low, 26, said that the move by Grab may be a bid to encourage more drivers to rent vehicles from the company.

He said: “Given that the criteria is that the vehicle is not older than three years, it seems that Grab is trying to get drivers to rent directly from them, as their fleet usually consists of newer vehicles.”

Though he drives a rental car and may qualify for the scheme, Mr Low is adopting a wait-and-see approach, and he said that he will read feedback from drivers who have tested it before signing on.

Transport experts say the new service appears to be an attempt to segment the market, and raise prices.

“There must be a segment of consumers who are willing to pay a little more, but not as much as GrabCar premium, for an assurance of quality... It is not too different from the ‘premium economy’ option that airlines offer,” said Dr Walter Theseira, a transport economist at the Singapore University of Social Sciences.

However, he questioned the need for such a service in a relatively small market like Singapore, where there might not be a big difference in service standards and fleet of cars. Other than Singapore, GrabCar Plus was launched in Bangkok late last year.

Dr Theseira said: “I can see the value in other cities where there may be a larger difference in ride quality. It definitely makes more sense to push out this service in bigger cities, where cars could be older because there is no system (like the Certificate of Entitlement) to encourage drivers to change to newer models.”

Though some drivers were concerned that the scrapping of GrabCar may result in increased competition on the JustGrab platform, transport specialist Terence Fan from the Singapore Management University said while individual drivers may feel that the competition is heating up, he was unsure if this was cause for concern for private-hire drivers as a whole. This is because private-hire vehicles far outnumber the number of taxis in the pool.

Assistant Professor Fan said: “This could be one method by Grab to try to subtly raise prices and revenues. Given that they are not able to announce an increase in fares, another way to do so is by segregating the market and offering riders options, in the form of a new service.”

Grab could face a tough ride trying to convert drivers and customers to its new service. Commuters TODAY spoke to said that cost and efficiency are what they look out for when booking a ride.

Grab rider Ms Charissa Kow, 24, said: “I usually go for whatever is the cheapest. Most of the time JustGrab is cheaper, so I choose that, so if the GrabCar option is gone I don’t think it will make much of a difference to me.

“To me a ride is a ride, I don’t really care if it’s a Ferrari or Chery, as long as I get to my destination quick.”