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 increase them 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 it is 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 spelt 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 generally 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 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, adding that the matter would be discussed further during the Transport Ministry’s budget debates later this week.
Related story: ComfortDelGro is third taxi firm with plans to introduce surge pricing
Related story: Taxi operators must outdo disruptors