Grab cancels cash advance scheme for drivers following regulatory concerns

Grab announced that it has ended its cash advance program for drivers and riders about three months after it caught the attention of Singapore’s Ministry of Law.

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“In line with our focus on innovation and continuous commitment to serving our partners, we have discontinued the Cash Upfront program to explore improvements that can be made to ensure the needs of our drivers and delivery partners are best met,” a Grab spokesperson said without further elaborating on the reason for the program’s cancellation.

Launched in late 2018, Grab’s Upfront Cash Program allows select drivers and food delivery partners to claim their incentives earlier and repay from their earnings in up to 26 weeks. It charges no interest, but there’s an administrative fee of up to 8% of the cash advance amount, according to The Straits Times.

Grab claims that 98% of its partners who had joined the program were able to earn and return their incentives since launch. It said that the initiative aims to assist its partners with expenses like family emergencies, children’s education, or white goods purchases.

The program caught the attention of the government last year when some Grab drivers expressed difficulties in repayment due to fluctuating fares and incentives. Questions were then raised on whether Grab is using the scheme to bind its riders and drivers.

The Ministry of Law, however, did not elaborate on its findings on the program or specified whether Grab could resume it, according to the report. A ministry spokesperson emphasized that businesses should ensure their activities are lawful. “When they have reason to believe that their activities may constitute money lending, they should obtain a license or exemption in order to carry on a business of money lending, unless they are excluded from the Moneylenders Act.”