KUALA LUMPUR: E-hailing service provider Grab Malaysia today clarified that there were no new price increases for their services, but the shortage of drivers caused sudden price fluctuations.
A sharp increase in ride demands from passengers post pandemic and fewer drivers on the road possibly resulted in the price hike, since it uses a dynamic pricing model to benefit both the passengers and driver-partners.
Grab Malaysia in a statement today said these fluctuations in supply and demand are driven by several factors, among which are the shift to the endemic phase and the recent lifting of Covid-19 measures.
"In the past two years, many driver-partners have become inactive on our platform due to Covid-19 concerns and corresponding lack of demands for rides. And, with the recent lifting of Covid-19 measures, we observed a quick rise in ride bookings on our platform. This was boosted further by the recent festive periods," it said.
It added that 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.
Grab Malaysia added that barriers to entry resulted in a slower response time for new drivers to be recruited to meet the sharp increase in demands.
"New drivers are required to meet various regulatory requirements, such as six hours of training, exams at driving schools, vehicle inspection, purchasing insurance, and collating and submitting documents to various government agencies for processing.
"These place a structural limit to the speed at which new driver-partners can come on board to benefit from the additional income."
Grab Malaysia said as of mid-May this year, the number of driver-partners on their platform was still less than 70 per cent of what it was pre-pandemic.
"We want to be clear that we have not made any changes to our fare structure," it said.
It said the increase in traffic congestion post pandemic has resulted in increase of costs (in time and fuel) to serve each ride, which simultaneously also reduced the effective capacity of drivers to serve more rides.
"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 demands," it said.
It said that there are a number of steps it has taken, such as implementing more new incentives for new and old drivers to draw them onboard.
Among the incentives, were giving subsidies up to 100 per cent of total driver-partner regulatory compliance costs, referral bonuses up to RM300 to existing driver-partners to refer and offering a bonus of up to RM1,000 to any Malaysian who gets on board as a driver-partner on Grab.