Grab Implements New E-Hailing Fares, Rides May Cost Slightly More During Peak Hours

Alex Cheong Pui Yin

17th January 2023 - 3 min read

Grab Malaysia has updated the peak hour fares and incentive structure for its e-hailing service, with the aim to provide its drivers with fairer compensation, especially for their time spent stuck in traffic during peak hours.

Effective immediately, Grab’s new fares during peak hours will now be based primarily on the time needed to complete a ride, while the distance covered plays a secondary role. With this, the fare per minute will be increased from the existing 20 sen to 43 sen, whereas the fare per kilometre is reduced from 70 sen to 25 sen in the Klang Valley. Meanwhile, the base and minimum rates remain unchanged at RM2 and RM5, respectively.

Here’s a quick look at how the new fares compare to the previous rate:

In a statement, Grab explained that this update is driven by comments from its driver partners, many of whom highlighted that the existing fares do not offer sufficient compensation for the time spent in a jam during peak hours. “Please note that we need to balance the higher fare per minute with a lower fare per km as maintaining the existing fare per km will result in a significant increase in fare levels, causing a drop in demand from passengers,” it further explained.

With this compromise, Grab said that passengers should see little to no change in what they have to pay, with only minor increases or decreases depending on the hours of their rides. To better illustrate this point, Grab also shared the current and new fare calculations for two scenarios where passengers travel a similar distance (10km), but at different hours (peak versus regular hours). The fares are calculated based on the formula: base fare + (trip distance x fare per kilometre) + (trip duration x fare per minute)):

*With the new fare structure, customers will likely need to pay slightly more during peak hours when riding in busy areas, where traffic is heavy.*

*Meanwhile, customers who make trips that take faster to complete, such as trips on clear highways during regular hours, will enjoy lower fares.*

In response to this update, vice president for the Grab Drivers Malaysia Association (GDMA), Mohd Azril Ahmat said that the fare adjustment is disappointing, given that most drivers prefer to work during non-peak hours. “Based on the feedback I’ve gotten from some drivers today, they are expecting at least a 30% reduction in earnings. This is because they reduced the earnings based on distance, which is down to just 25 sen. My concern now is that other ride-hailing companies will follow the same fee structure,” he said.

Founder of online radio station Ehailing.fm, Fazal Kamarudin also said that the fee adjustment was shocking. “From 70 sen per kilometre to 25 sen doesn’t make sense. I hope that Grab can study the fee structure again, and the relevant authorities should look into the matter,” he added.

Aside from introducing the new fares, Grab also rolled out two new incentives – namely the Far Pickup Bonus and Hourly Cashback – to replace existing initiatives (Time Booster and Cashback Bonus) and to better motivate its driver partners. Specifically, the Far Pickup Bonus incentive will offer Grab drivers a compensation of 25 sen to 35 sen for each minute of pickup after five minutes. Meanwhile, the Hourly Cashback incentive rewards drivers with cashback multipliers of up to 2x, based on the number of rides that they’ve completed in the previous four weeks, on a rolling basis.

(Sources: Grab, The Star)

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Alex Cheong Pui Yin

Previously covered recruitment-related stories and had a short stint as a copywriter for the property industry. She subsequently developed an interest in investment and robo-advisors.

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