More than 2,000 ComfortDelGro cabbies could jump ship and join rival taxi operators partnering Grab or switch to become drivers of its private-hire car service, less than two weeks after Grab dangled heavily-discounted rentals to entice them, TODAY has learnt.

This was the number of drivers from Singapore’s largest taxi operator who have signed up for a Grab driver account as part of the recruitment drive — the first step to making the crossover, this newspaper understands.

Grab’s offer, originally slated to end today, will be extended by another fortnight to Sept 29 owing to “popular demand”, the ride-hailing company said yesterday.

In an attempt to counter Grab’s move, ComfortDelGro yesterday ran an advertisement in Chinese daily Lianhe Zaobao, trotting out rental rebates totalling S$3,600 over six months — which is less attractive than what Grab is offering.

The taxi operator did not respond to TODAY’s queries.

Transport experts interviewed said the sizeable number of drivers involved could deal a major blow to ComfortDelGro’s revenue. ComfortDelGro had nearly 15,500 cabs under its Comfort and CityCab brands as of July. Taxi operators are generally guarded on the number of drivers on their books owing to commercial sensitivities. But in August last year, ComfortDelGro said it had 37,000 drivers.

Grab’s offer, broadcast to thousands of ComfortDelGro’s drivers earlier this month, promised rental rates that would shave about half their rental bills in some cases. It came after ComfortDelGro announced talks with Uber on a potential tie-up.

Under its campaign, Grab is offering a daily discount of S$50 for six months on rents for existing ComfortDelGro drivers to join any of Grab’s five partner taxi firms: Trans-Cab, Prime Taxi, SMRT Taxis, Premier and HDT Singapore Taxi.

The discounts are higher if drivers take on a private-hire car via Grab’s rental arm, GrabRentals. In such cases, they will get a S$1,688 monthly discount, which translates to about S$60 off their daily rental bill. Grab will fund the rebates, TODAY understands.

One ComfortDelGro driver making the switch, who requested to be known only as Mr Evan, 50, said his earnings have been hit, resulting in a tough slog to feed his family of three.

Mr Evan, who has been with ComfortDelGro for about three years, said bookings via the company’s app and hotline have tumbled by about 80 per cent. He drives seven days a week, and has had to put in more hours on the road.

Three years ago, driving 10 hours daily could yield a profit of up to S$120 a day. Lately, clocking 16 hours a day — which he does about four times weekly — earns him between S$60 and S$100. He pays a daily rent of S$122 for his Hyundai i40 cab, after an S$8 rebate from ComfortDelGro.

“It’s still very tough,” he said. He will switch to a Premier cab next week. With the discount and extra rebates from the firm, his daily rent will be cut by about two-thirds to just S$39. “I’ll maybe get two to three customers (to) cover my rental … the rest is all profit,” he said. While he said it was “fortunate” the offer came by, he was unsure what he would do after the offer lapses in six months.

He might consider returning to ComfortDelGro if it reduces its rates.

Singapore University of Social Sciences urban transport expert Park Byung Joon said the prospect of losing more than 2,000 drivers at one go could deal a “really big blow” to ComfortDelGro.

It must react quickly if it “wants to stay in the business”. The only step it could take is to match Grab’s offer, said Dr Park but he noted that this was not sustainable for the firm. He felt that Grab might be hindering fair competition by drawing on its financial power, and said the authorities should look into whether this was allowed. “It sets the tone (for) what Grab or Uber can do with their cash,” said Dr Park, who noted that the move might augur ill for commuters in the long term if taxi firms are put out of business.

Still, transport economist Walter Theseira, also from SUSS, noted that the pool of drivers who signed up with Grab is a fraction of ComfortDelGro’s total pool of drivers. The remaining majority of drivers probably feel “more secure” staying with the taxi operator.

Acknowledging that ComfortDelGro’s revenues would be hit by the poaching, Dr Theseira said it may have to advance its discussions with Uber to seek financial backing in order to offer incentives to entice drivers to return or recruit new ones.

As far as commuters are concerned, there would be minimal impact on taxi availability, he said. “Most commuters have a lot of alternatives, so if they feel like they’re not getting something fast enough from one channel, they will just switch to another.”

Source:
courtesy of TODAY

by KENNETH CHENG

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