Surge pricing gets mixed reaction, Latest Singapore News - The New Paper

Surge pricing gets mixed reaction

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JustGrab launched to little fanfare yesterday

Dynamic pricing hit about 40 per cent of the taxi fleet in Singapore with little fanfare yesterday.

After a week of beta-testing, JustGrab - which combines about 50,000 fixed-fare taxis and private-hire cars on the same platform - was made available to all commuters.

Dynamic pricing, or surge pricing, which adjusts fares based on demand, is used by ride-hailing apps Grab and Uber.

The Land Transport Authority and Public Transport Council gave taxi firms the green light to implement this pricing model two weeks ago.

A check at three taxi stands in the Central Business District yesterday evening showed that it was business as usual for commuters and cabbies.

A consultant, who wanted to be known only as Max, 32, managed to hail a cab in five minutes.

He said: "There are lots of offers on Grab, so it is convenient to use those sometimes. But if I see an available taxi on the road, I won't use an app to book one."

While JustGrab fares are generally lower during off-peak periods, they can be significantly higher when dynamic pricing kicks in during peak periods. For instance, at 6.50pm yesterday, it cost $47 to travel from Raffles Quay to Woodlands on JustGrab, compared to an estimated metered fare of $26 to $34 on GrabTaxi.

Miss Victoria Ng, 21, a veterinary technician who uses Grab about three times a day, is keen to try JustGrab.

"It's a great initiative from Grab. It allows me to reach my destination at a reasonable rate with the added benefit of having to wait for only up to four minutes for my ride," she said.


Reaction among cabbies was mixed.

Mr William Lim, 40, a Prime taxi driver who was involved in the beta testing of JustGrab, said it was a good initiative.

"I get a few more bookings with the combination of JustGrab and GrabTaxi during non-peak period. I am depending on dynamic pricing to improve my takings."

But TransCab driver Heng Buk Chye, 48, a cabby of seven years, said he was earning less with JustGrab, which he was introduced to yesterday.

Grab takes a 10 per cent cut from cabbies assigned to JustGrab passengers, while GrabTaxi cabbies pay a flat commission of 50 cents.

He said: "It is already tough to get rides (since the introduction of) apps such as Grab and Uber as it is rare for people to flag cabs. It is even harder to get bookings with JustGrab because we have to compete with GrabCars."

A spokesman for Premier Taxis, which has about 3,000 drivers on the Grab platform, told The New Paper yesterday it was still too early to provide feedback on usage of the app.

Transport economist Michael Li thinks the JustGrab model has given Grab a stronghold in the industry and that dynamic pricing will be the norm in the future.

ComfortDelGro, which controls about 60 per cent of taxis here, has said it will not introduce surge pricing for now but will instead use a flat-fare structure similar to metered fares for trips booked via apps.

Professor Li added: "It remains to be seen if commuters would be fully comfortable with dynamic pricing and ComfortDelGro could use that to its advantage. Alternatively, they could team up with Uber."