Will we actually be paying more or less with the new pricing model?
Land Transport Authority (LTA) and Public Transport Council (PTC) have approved joint proposals from taxi companies and leading ride-hailing platform Grab to implement a dynamic pricing model.
Together with Grab, 5 taxi operators including Trans-cab and SMRT proposed to introduce dynamic fixed fares on rides. Following this price model, the total fare for each ride will take into account real-time demand from customers and supply of drivers. Similar to GrabCar, fare certainty is provided for passengers as the fare will be displayed upfront at the time of booking.
This new pricing plan aims to bridge the gap between demand and supply, especially during peak hours. It follows the price structure of GrabCar but differs greatly from the current taxi-booking system GrabTaxi that charges metered fares.
The surge pricing structure will be implemented in Grab’s new service, JustGrab, and will involve over 10,600 taxis from SMRT, Prime, Premier, Trans-cab and HDT. Depending on the proximity of available drivers, JustGrab will assign either a taxi or a private-hire car to the user.
Premier Taxi Managing Director Lim Chong Boo shared that the new pricing system will “allow taxi drivers some levelling of the playing field,” as some cab drivers struggle to compete with private-hire drivers resulting from the rigid surcharge system taxi operators abide by.
With an increased supply of cabs and private-hire cars, JustGrab’s rates are likely to be lower than those of GrabTaxi or GrabCar, but only during off-peak hours and after midnight, as no late-night levies will be charged. During periods of high demand, however, market forces are likely to push the price upwards, making JustGrab’s rates comparable to other options. This explains the comment made by GrabTaxi’s Singapore head Melvin Vu, that we can expect to pay less, “most of the time”.
Apart from prices, passengers are also concerned about whether JustGrab’s surge pricing strategy would harm passengers who hail cabs on the street or at taxi stands, as drivers may prefer the surge prices offered by JustGrab during peak hours. In response, Mr Vu affirmed that “the majority of taxi drivers we speak to say they’ll pick the nearest job, whether it’s from your Grab app or street hail.”
On the other hand, Singapore’s largest taxi operator ComfortDelGro has decided not to join JustGrab, and has written to PTC regarding plans to implement its own pricing system. ComfortDelGro intends to introduce a flat fare structure which will come into play in about 2 to 3 weeks.