Grab declined to confirm what percentage of the cut it would take and would only say that it would release more details next week
Grab may take 10% cut from cabbies for 'dynamic pricing' Grab is working with taxi operators to launch a flat fee option based on demand. ST PHOTO: DESMOND WEE

The introduction of a "dynamic pricing" option for cabs will level the playing field between cabbies and private-hire drivers.

But it remains to be seen if this will improve the livelihood of taxi drivers, many of whom have been feeling the heat since the introduction of private-hire car services Grab and Uber.

The Straits Times understands that Grab, which is working with four taxi operators to launch the flat fee option based on demand as early as next week, will take a 10 per cent cut from each fare.

Currently, cabbies only pay operators between 30 cents and 50 cents per booking fee.

Grab declined to confirm what cut it would take and would only say that it would release more details next week.

National Taxi Association executive adviser Ang Hin Kee said taxi drivers have a choice of whether or not to bid for jobs with dynamic pricing. Mr Ang added that cabbies will "vote with their feet" if this commission rate is found to be too high.

He noted that taxi operators have, in recent times, been making changes to help cabbies level the playing field.

Some companies have cut rentals, while others have implemented new rental schemes - such as on an hourly basis - which give taxi drivers more flexibility.

Starting this year, the Land Transport Authority also removed a requirement for taxi drivers to fulfil a daily mileage of 250km.

"As the industry evolves, changes to the rental cost structures and taxi fares will provide taxi drivers with both flexibility and greater support towards sustaining taxi driving as a livelihood," Mr Ang said.

Dr Park Byung Joon, a transport expert at the Singapore University of Social Sciences, said that while taxi drivers used to have the certainty of knowing how much they earned through the meter, they would now have to bear more "risk" in such a dynamic pricing system. They will be more involved in decision-making too.

"If they wait for a better fare from a booking, they are also giving up the 'sure' opportunity of a street pick-up. They will have to adopt some kind of strategy," he said.

Cabby Armstrong Ho, 49, said: "Many customers have switched to private-hire cars in the last few years. If our prices are flexible, maybe we can win them back. Passengers may now choose based on safety, instead of just price."

But cabby Henry Tay, 48, expressed worry about the 10 per cent commission. "For company bookings, a flat 50-cent cut is taken. But now if I take a $15 fare, I have to give up $1.50. This will hurt my earnings."