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Uber, Grab to maintain current pricing system

 | May 31, 2017

The two firms say they won't adopt a system being tested in the US, under which charges are based on presumptions of customers' willingness to pay.

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PETALING JAYA: If you’re a frequent user of ride-sharing app Uber, you’ll be glad to hear that Uber Malaysia will not be adopting the route-based pricing currently being tested in the United States.

A recent Bloomberg report highlighted Uber’s new route-based pricing system, under which charges are based on assumptions of amounts customers are willing to pay rather than on a combination of mileage, time and other multipliers.

With the route-based pricing system, those travelling from an upmarket area to another may have to pay more than those travelling to a poorer area, even if the distance and traffic conditions are the same.

Had this been adopted in Malaysia, a 12km journey from Mont Kiara would cost more than a 12km trip from Shah Alam to Taman Sri Andalas in Klang.

In a brief statement to FMT, Uber Malaysia said the route-based pricing system would not reach our shores.

“Uber operates in 75 countries, and each of them has different laws and different regulatory frameworks,” it said. “This is not happening in Malaysia.”

Neither would Grab Malaysia, another major player in the ride-sharing business, adopt the system, said its country head, Sean Goh.

Goh told FMT his company did not practise discriminatory pricing and had no plans to do so.

“Our pricing mechanism is based on real-time supply and demand,” he said. “Basically, wherever you go, you’re enjoying the same fixed pricing.”

He said Grab practised “dynamic pricing”, which sees fares fluctuating briefly according to the demand and supply in high traffic areas during peak hours.

He said if there was significant demand for Grab rides from a certain location at a certain time, or if an area was affected by floods or traffic jams, then fares might rise.

“But even so, the fares usually increase marginally, and our dynamic pricing does not discriminate according to neighbourhood or our users’ backgrounds.

“We also utilise heat maps to track demand and route our drivers accordingly to reduce the possibility of our customers experiencing dynamic pricing.”

The emergence of Uber and Grab in recent times has led to discontent among taxi drivers, resulting in protests and even cases of assault against Uber and Grab drivers.

Last year, the cabinet gave the Land Public Transport Commission (SPAD) the go-ahead to regulate Uber and Grab.


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