Update (January 30, 5:00 pm): This article was updated to include a response from Grab.
Singapore-based Grab is offering cash advances to its driver-partners for up to S$10,000 (about US$7,600).
Photo credit: Grab
Called Partner Cash Advance, the program’s minimum amount was set at US$760. The maximum amount and tenures available to drivers are based on their behavior – which includes the number of completed rides – in the last month.
To repay the cash advance, Grab will automatically deduct amounts every week based on the tenure decided, which could range from three months to nine months.
While Grab did not disclose the fees it plans to collect per transaction on its website, LinkedIn News editor Ting Wei Toh shared a screenshot from a driver who was quoted an admin fee of US$342.81 for a US$3,809.02 advance – that’s 9% of the proposed amount.
A representative from Grab told Tech in Asia that there’s a one-time processing fee of up to 2% per month, which is based on driver behavior as well.
Nevertheless, the amount the Grab driver in the screenshot is payable for six months, with Grab taking US$146.50 weekly. Ting noted that when viewed through the lens of a loan payable in a year, the terms of the advance would be similar to paying an interest of 18% per annum.
In comparison, Singapore’s DBS Bank offers an annual interest rate of 8.89% for loans of a similar amount, he added. But, unlike the bank’s offering, Grab’s program is more readily accessible and has no rates that can accumulate and compound.
While there are no set late payment fees, Grab said driver-partners who consecutively miss payments will be unable to get more offers and may be blocked from GrabFinance offerings.
See also: Grab delivers the goods in its Q3 results, talks up ads business
Drivers who have been with Grab for at least three months and have been picking up work for at least a week are eligible to apply for a cash advance.
They also have to generate at least US$760 in monthly earnings through Grab and meet the company’s internal credit risk assessment.
Currency converted from Singapore dollar to US dollar: US$1 = S$1.31.
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