Grab set to provide fixed upfront fares for booking cabs
New pricing system will be subject to dynamic fares, or surge pricing
Commuters booking a taxi through ride-hailing app Grab will soon have more certainty about their fares, though those fares will also be subject to a new pricing system that would see them increase during periods of high demand.
The Straits Times understands that the ride-hailing firm will be rolling out a new service, called JustGrab, that will provide its users with fixed upfront fares when booking a taxi.
These fixed fares will take into account travel time, booking fees as well as any location and time-based surcharges.
Grab users are currently able to view upfront the cost of a private hire GrabCar ride, which is a fixed price. But they can view only the estimated cost of a taxi ride, as these are based on the metered fare.
The new fixed fares for taxis will, however, be subject to dynamic fares - also known as surge pricing - in which prices increase during periods of high demand.
These changes were spelled out in a document that Grab will be issuing to cabbies, seen by The Straits Times.
Private-hire car services offered by Grab and Uber are already subject to surge pricing - making them cheaper during the off-peak hours but more expensive than metered taxis when demand is high.
It is not known when the new system will come into effect. Grab declined comment when contacted yesterday.
The Straits Times reported last week that Trans-Cab and Premier Taxi were working with Grab on plans to implement dynamic pricing.
ComfortDelgro - the largest taxi operator here - confirmed it had also written in to the Public Transport Council regarding plans to implement its own dynamic pricing.
National Taxi Association executive adviser Ang Hin Kee said that while dynamic pricing could help cabbies earn more, it was important that taxi fares remained "competitive" compared with those of private-hire cars during peak periods.
Commuters said surge pricing could drive them to look for alternatives.
Digital director Ameera Begum, 29, said it would provide "no incentive" to turn to Grab taxis over a private-hire ride.
In a Facebook post yesterday, Second Minister for Transport Ng Chee Meng said that it was "not unexpected" that some commuters would be uncomfortable with the introduction of dynamic pricing.
"However, those who prefer not to use this new option can still choose to pay for a booked taxi by the meter," he said, adding that dynamic pricing would not apply for street-hires.
Mr Ng also noted that supply and demand would determine whether fares would be higher or lower under dynamic pricing.
"Taxi companies should ensure that dynamic pricing improves and not worsens the matching of supply to demand of taxi services," he said.