Grab will introduce a tiered rewards programme pegged to weekly trip targets that guarantees gross monthly incomes of $6,888 to $11,888, before deducting costs
Grab to offer drivers guaranteed gross income of $6,888 to $11,888 before deducting costs Grab will introduce a tiered rewards programme pegged to weekly trip targets by the end of October 2018. ST PHOTO: KELVIN CHNG

In a move to shore up its position in preparation for the arrival of a new rival, ride-hailing firm Grab is rolling out a guaranteed income scheme for its drivers.

By the end of this month, the five-year-old company will introduce a tiered rewards programme pegged to weekly trip targets. It will guarantee gross monthly incomes of $6,888 to $11,888, before deducting costs such as rental and fuel.

Grab Singapore head Lim Kell Jay said on Monday (Oct 22) that if a driver is unable to reach this amount despite meeting the various targets, the company will top up the amount. "We believe this is sustainable for them," he added.

And by November, it will partner various food and beverage outlets to offer its drivers $1 breakfasts.

This is on top of various other incentives, including discounts for fuel.

Mr Lim acknowledged that drivers are complaining of lower earnings, even as riders are complaining of costlier rides.

In a recent online poll conducted by Facebook group Singapore Private Hire Car Drivers & Riders Community, 86 per cent of some 1,200 respondents said they would quit Grab and drive for Go-Jek when the latter arrives in late November.

Mr Lim said: "We have been talking to our driver-partners and know that they are unhappy. We also acknowledge that there is a lot more we can do. With their feedback, we have been working hard on a number of new initiatives to address their top concerns."

He claimed that average fare had actually fallen by 3.4 per cent since its Uber deal in March. Promotions however, have shrunk.

"So consumers perceive that effective price has gone up, and that's something we don't deny," he notes. But the algorithm which decides pricing - which is dynamic - has not changed. The cap on dynamic pricing has not changed, either.

This, Mr Lim said, is scrutinised by a monitoring trustee appointed by the Competition and Consumer Commission of Singapore.

"I want to highlight that if prices are too high, passengers will not book. But if they're too low, drivers will not accept jobs.

"We need to strike that balance. We can't let prices go too high or too low if we want to provide a reliable service," he said. "No point giving you a low price but half the time you can't get a ride."

Asked how Indonesian ride-hailing rival Go-Jek's impending arrival will affect Grab, Mr Lim said: "Go-Jek, like all competitors who have come into the market in the past, like Uber and EasyTaxi... always pushed us to be better, to be more innovative.

"Each time a competitor comes in, it pushes us to change our course a little bit."

Asked how Grab's course will be altered this time, he said: "I don't know yet, but we need to remain relevant to our customers."