Increase in Ride-Hailing Fees in Singapore

SINGAPORE – Starting January 1, 2025, users of popular ride-hailing services Grab, Gojek, Tada, and ComfortDelGro's CDG Zig will face a fee increase for every trip they take. The operators are raising their platform fees in response to the upcoming Platform Workers Act, which aims to improve labor conditions for drivers and delivery personnel.

Details of Fee Increases

Grab, Singapore's largest ride-hailing company, will increase its platform fee by 20 cents, bringing the total charge from 70 cents to 90 cents per trip. This adjustment is designed to contribute to workers' Central Provident Fund (CPF) accounts, provide work injury compensation, and support various welfare initiatives for their drivers.

Following suit, Gojek will raise its fees by 30 to 50 cents, resulting in a new fee range of 90 cents to $1.50 per trip. ComfortDelGro, the leading taxi operator in Singapore, will similarly adjust its fees, matching Gojek's increase and establishing a new fee of $1 to $1.20, depending on distance and time taken.

Tada, another player in the market, will also hike its platform fee by 50 cents, raising it from the current range of 55 cents to 75 cents to $1.05 to $1.25 pre-GST. The drivers' fees associated with these services will also remain in place beyond 2024, designed to ensure earnings stability amid the changes.

Reason for the Increase

The fee adjustments stem from the recently passed Platform Workers Act, which mandates enhanced protections for platform workers, including taxi and private-hire drivers. As per estimates, implementing this legislation may lead to additional costs of approximately US$368 million (S$499 million) for platform companies over the next five years, necessitating the fee increases to maintain sustainability while ensuring better welfare for workers.

New Contribution Rates

The new law will also require platform companies to contribute progressively higher CPF rates to their workers, with an initial contribution starting at 3.5% of net earnings in 2025 – a figure that will rise to match employer contributions for non-platform firms by 2029. This increase will apply to workers born on or after January 1, 1995, while older workers will have the option to opt-in.

Work Injury Compensation

Furthermore, all operators must provide work injury compensation insurance at levels comparable to traditional employees, thereby offering enhanced security for drivers.

Reactions from Customers and Drivers

Customer reactions indicate a mix of understanding and concern. Many regular users of these services recognize the importance of supporting worker welfare, although some drivers express unease about the potential impact on customer demand. ComfortDelGro cab driver Noor Hamzah raised concerns that increased fares might lead to a decline in ridership, potentially affecting their income in the long run.

CCCS Monitoring the Situation

Interestingly, the synchronous fee hikes across these four firms have caught the attention of the Competition and Consumer Commission of Singapore (CCCS). They will be monitoring the situation closely to ensure there is no anti-competitive behavior involved in these simultaneous price adjustments.

Conclusion

In summary, while the raise in ride-hailing fees is primarily aimed at improving worker welfare and security, the broader impact on both customers and drivers remains to be seen. To ensure fair practices and protect consumer interests, authorities are ready to take action against any suspicious pricing behaviors.

What’s Next?

Stay tuned as the new Platform Workers Act takes effect, potentially altering the landscape of ride-hailing services in Singapore significantly!