Grabcar adjusts rates to match Uber, price war imminent?

Last week Uber cut the fares for its entry-level UberX service by 15%, resulting in the following rates

sg_farechart

On Sunday, Grab announced that it would be cutting fares for its GrabCar Economy service, presumably to match Uber

newfaressg

How does Uber now price relative to GrabCar Economy? Well, the base fare and minimum fares are the same, but UberX charges $0.45 per KM vs Grab’s $0.80. You need to factor in the time charge for UberX too, though.

So which is cheaper?

Scenario 1

Suppose you’re travelling mostly by expressways. Let’s assume a 60km/h average speed (I’m not pulling these figures out of my ass, check out LTA’s average speed statistics)

Effective cost per KM for UberX would be $0.65 ($0.45 per KM + $0.20 for the 1 min needed to travel that 1 KM)

Effective cost per KM for Grab would be $0.80

Scenario 2

Now suppose you’re doing a more mixed journey with plenty of starts and stops.  Let’s assume a 30km/h average speed (again, from LTA’s stats)

Effective cost per KM for Uber would be $0.85 ($0.45 per KM + $0.40 for the 2 mins needed to travel that 1 KM)

Effective cost per KM for Grab would be $0.80

Other considerations

There are some other factors you should take into account when comparing Grab and Uber

  • With Grab, the fare is fixed at the time you make the booking. This means that even if your driver gets lost, you’re still going to pay the same amount (If your Uber driver gets lost you could of course write to them to do a fare adjustment though)
  • Grab doesn’t charge time costs as such, but there is a $5 charge for every 10 minutes of waiting. If you’re looking at heavy traffic then this might become an issue ($0.50 per minute for Grab versus $0.20 for Uber)
  • Grab charges an additional $5 for making a stop within 5km of your intended destination. So if you’ve got 2 people going to the same general area it would be more costly to ride with Grab

Given the above factors, I’m leaning towards Uber (the fact that it allows you to earn Starwood points when you ride doesn’t hurt either). I’ll probably still have the Grab app on my phone for those crazy peak hour times when everything is booked up and the more options you have the better. In any case, lower prices are always good with me, so I can’t see this Grab fare cut as anything other than positive.

I believe (though please correct me if I’m wrong) that both Grab and Uber spending will code as online for the purpose of earning 10X with the DBS Woman’s World Card.

Any other considerations I might have missed out?

 

cover photo by techinasia

Aaron Wong
Aaron Wong
Aaron founded The Milelion to help people travel better for less and impress chiobu. He was 50% successful.

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Becky

Normal taxi prices and the same or cheaper, when there is no booking fee or peak hour surcharge.

Becky

you’d think that, but the new comfortdelgro app…i get normal taxis quicker than uber and grab…

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