Brief: Grab toying with ‘surge-free’ membership model

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The news (extracted from Today):

• Ride-hailing firm Grab is piloting a scheme in which users are guaranteed fares free of surge pricing – where fares rise or fall in real time according to supply and demand – in return for a US$37 monthly membership fee.
• Grab told Today that the service – named FareLock Pass – is currently being tested on “a very small and select group of frequent Grab riders,” in a pilot that runs until November 14.
• Customers who buy the pass will still pay surge charges on booking a ride, with Grab crediting the difference to their GrabPay accounts after booking.

Why it matters:

• This is Grab’s latest plan to retain users in the face of fierce competition from ride-hailing rivals Uber – which similarly operates throughout Southeast Asia – and Go-Jek, which dominates the Indonesian market, as well as from traditional licensed taxi operators.
• Grab has sought cooperation with the latter group, and began partnering with Singapore taxi companies such as SMRT earlier this year to roll out JustGrab – a fixed-fare service subject to surge pricing.
• ComfortDelGro, the city-state’s largest licensed taxi operator with close to 60 percent market share, offers a flat-fare option based on journey distance and existing surcharges.

Converted from Singapore dollar. Rate: US$1 = S$1.36.