More demand, fewer drivers, Grab says on price fluctuations

E-hailing service Grab Malaysia says the recent price fluctuations were a result of fewer drivers on the road to accept a sharp increase in passenger ride demand.

In a statement, it said that as of mid-May, the number of driver-partners on its platform was still less than 70% of what it had been pre-pandemic.

“We want to be clear that we have not made any changes to our fare structure. Grab adopts a dynamic pricing model to ensure our passengers get a ride when they need one and our driver-partners are compensated fairly for their time and effort.

“When there are more people booking a ride than the number of drivers available in an area, fares will ‘surge’ or go up to encourage more drivers to head to where passengers are,” it said.

Grab Malaysia said the fluctuations in supply and demand were driven by several factors, including the fact that many driver-partners had become inactive over the past two years due to Covid-19.

It said the recent lifting of Covid-19 restrictions contributed to a quick rise in ride bookings, which gained further traction during the recent festive periods.

Due to the need to meet various regulatory requirements, there was a slower response time for new drivers to be onboarded to meet the sharp increase in demand, it added.

“Finally, we have observed a large increase in traffic congestion. This increases the cost (in time and fuel) to serve each ride, while simultaneously reducing the effective capacity of drivers to serve more rides.

“While we strive to bring more driver-partners on board, there is a mismatch as the increase in demand for rides is outpacing the growth in the number of drivers.

“In the long term, we remain steadfast in our commitment to providing affordable rides for our community. However, in the short term, we will endeavour to meet all demand,” it said.

Grab Malaysia also said it had taken steps to boost the number of drivers, including increasing incentives for driver-partners to get back on the road during peak hours, subsidising up to 100% of total driver-partner regulatory compliance costs, and offering referral bonuses of up to RM300 to existing driver-partners to refer and help onboard new driver-partners.

It also suggested that passengers plan their trip and book earlier than usual.