Ride-hailing fares – notably those of Grab – were recently reported to have increased by up to 400% during peak hours, sparking discontent from consumers who called for government intervention. Earlier this week, the transport ministry requested that certain ride-hailing companies explain and clarify the alleged increase in fares.
Yesterday, following a meeting with operators, the ministry said that ride-hailing providers had explained that the reason for the fare increase was due to a lack of drivers combined with a significant rise in demand for such services following the easing of restrictions.
It said that operators had assured the ministry that there more resources would be allocated towards increasing the number of drivers currently available. The ministry added that the government did not regulate fares, and had no plans to do so, with ride-hailing operators and providers permitted to set their fare structures based on their own formula and their terms of service with their consumers in a free market.
As an add-on to the ongoing topic, Grab Malaysia has issued a statement on the matter. In its response, the company made it clear that it has not made any changes to its fare structure. It said it adopts a dynamic pricing model to ensure its passengers get a ride when they need one, and that its drivers are compensated fairly for their time and effort – traffic congestion has also meant that the cost in both time and fuel to serve each ride had gone up.
It explained that when there are more people booking a ride than the number of drivers available in an area, fares would “surge” or go up to encourage more drivers to head to where the passengers are. It added that the price fluctuations, as the company terms it, is a result of there being fewer drivers to accept the sharp increase in demand. Grab stated that as of mid-May, the number of drivers on its platform was still less than 70% of what it was pre-pandemic.
The company said that barriers to entry for new drivers are also amplifying the issue. It explained that new drivers are required to meet various regulatory requirements, such as six hours of training, exams at driving schools, going through vehicle inspection and purchasing insurance, and collating and submitting documents to various government agencies for processing. It said that this places a structural limit to the speed at which new drivers could come on board.
In a bid to correct the supply and demand imbalance in the short term, the company said that it has implemented steps to increase the number of its drivers. The first is by increasing incentives for drivers to get back on the road during peak hours.
It will also offer a bonus of up to RM1,000 to any Malaysian who comes onboard as a new driver on its platform, and referral bonuses of up to RM300 to existing drivers to refer and help new drivers to Grab. The company said it is also set to subsidise up to 100% of total driver regulatory compliance costs, and assist them to navigate through these.
Grab advised its users to plan their trip and book earlier than usual, and also set an alert via the ‘Fare Alert Notification’ feature in the Grab app – users will be notified if the fare drops within the next 15 minutes
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so mahal leh sekarang. our minister and Grab wont admit it
You can choose not to use Grab then.
Many ppl enjoy stay @ home
Goyang kaki
Now also lazy to come out be Grab driver already,
Self claim, freelance B40.
“It explained that when there are more people booking a ride than the number of drivers available in an area, fares would “surge” or go up to encourage more drivers to head to where the passengers are.”
What BS is this? Drivers would not know where are the sudden high price areas because the app automatically assigns them the next passenger when they’re about to drop off existing passenger.
Even if that is true, the moment many drivers suddenly flock to the high price (jammed) areas then dynamic pricing system will bring the price down. What’s the point of going through traffic jams to get there?
Just admit it Grab that your system simply manipulates high demand – low supply situation to maximize profits like any other business in the free market. The more drivers earn, the more commission you earn. As a private business who are after profit, why wouldn’t you capitalize on this? Stop sugarcoating this fact.
All consumers are asking is for authority to put a ceiling to the percentage of surge cost so that it is fair to the drivers (compensate their extra time and fuel, plus some incentive) while also not excessively burdening passengers. 400% is an example of unfair and excessive surge charges.
All consumers? Are you sure? If you read thru the past tered comments nearly all are in favour of open free market to decide with no government intervention or limitations. So it is up to Grab how much they want to set, 400% kah, 500% kah, 700% kah, up to their business model. Most of the comments okay with that as they are willing to find other alternatives or mode of public transportation.
So I wonder where you got that “all consumers”?
Why you butt hurt leh? Work in grab kah? Oopss.
No changes to sw is one sided communication.. And there is no way to confirm that. Regardless a 400% surgery is absurd.. Just like any model, there must be a cap/limit for the fluctuations. So the right question is 400% spike make sense regardless of the demand etc.. If not what is the cap that should be there!
This is a democratic free market and no restrictions. So;
[The ministry added that the government did not regulate fares, and had no plans to do so, with ride-hailing operators and providers permitted to set their fare structures based on their own formula and their terms of service with their consumers in a free market.]
“due to a lack of drivers combined with a significant rise in demand”
Then will Grab drop their price 400% during non peak hours due to excess of drivers combined with significant drop in demand?
Only fool minister can accept this excuse!
Grab does have offpeak period rates which do have a bottom limit.
Grab should just come up with metered fare just like taxi or uber/Mula. Thn there would be more drivers around for peak hours instead of fixed rate. This is 1 of the reason why grab drivers chose to go offline during this times. Making them feel its not worth it to face the traffic and time consuming drive to pick and drop off passengers. And there would be no complain from passenger, as they will understand “oh traffic”.
Oh…now can offer huge incentive for new onboard drivers and comm for referral. Cool. Just like a certain taxi company which was able to slash their lease price up to half when Grab first stir the market.
Clear practice of the rich ‘using’ the poor. Kinda like voluntary force labor or glorified force labor.
GRAB = CONMAN COMPANY
If Grab stop operating in Malaysia, I wonder if the public will be happier with the old taxi uncle’s? Issue solved? Everything is getting more expensive. Ringgit crashing. Blame the government not Grab.
My mom recently paid RM70 to get from Bandar Utama to Shah Alam. Isn’t that almost the price for a full tank of fuel for a small car?