ComfortDelGro partially reinstates 10% credit card surcharge for app payments

Comfort DelGro (CDG), Singapore’s largest taxi operator, has always had an uneasy relationship with the credit card companies. Just think back to 2013, when Visa severed ties with CDG over the latter’s continued imposition of a 10% credit card surcharge, a practice that had been ongoing since the mid-1990s. 

You’d think that a Fortune 500 company might have the upper hand in negotiations, but it was Visa which quietly backed down a few years later, citing the face-saving reason that surcharges had become less of an issue, thanks to booking apps that allowed fee-free payments.

And yet that very premise seems more shaky now that CDG has announced a reintroduction of the 10% surcharge on street hails paid through its Zig app. 

CDG reinstates admin fees for app payments

For context, CDG imposes a 10% credit card surcharge on transactions paid with a physical credit card in the taxi. 

However, CDG’s Zig app also offers a “Pay for Street Hail” function, which allows customers to flag a cab on the street (or hop into one at a taxi stand), pair their ride, and pay with a credit card.

Historically speaking, the 10% surcharge was waived for such payments, but CDG has reinstated it from 1 January 2023 (and since the surcharge is itself subject to GST, you’re effectively paying 10.8% extra).

There’s one exception: DBS/POSB cards. Cardholders will receive a 10% admin fee waiver for all ComfortRIDE options paid with DBS/POSB Mastercard or Visa Cards, up till 31 December 2023. No promo code is required; the admin fee is waived automatically. Do note that you will still be charged the admin fee if you choose a metered fare booking or Pay for Street Hail.

Earn up to 7 mpd on CDG bookings via Kris+

In any case, those making pre-bookings would be better off paying with Kris+. From now till 31 March 2023, Kris+ users will earn up to 7 mpd on CDG taxi rides booked via the Kris+ app. A S$0.30 surcharge applies, but that’s still acceptable in my book.

Kris+ offering up to 7 mpd on Comfort taxi bookings

Here’s a reminder of the best cards to use for CDG payments via Kris+ (they will code as MCC 4121). 

🎁  CDG Taxi Rides via Kris+
Card	Earn Rate	Remarks
DBS Woman’s World Card Apply	4 mpd	Cap at S$2K per c. month
HSBC Revolution Apply	4 mpd	Cap at S$1K per c. month
UOB Lady’s Card Apply	4 mpd	Max S$1K per c. month. Must choose transport as bonus category
UOB Lady’s Solitaire Apply	4 mpd	Max S$3K per c. month. Must choose transport as 10X category
KrisFlyer UOB Credit Card Apply	3 mpd	No min. spend required

Even though the Citi Rewards Card will earn 4 mpd with the Zig app, you won’t earn 4 mpd when you pay via Kris+ because of the clause regarding in-app wallet payments. 

Not this again?

Consumers will be understandably ticked at yet another twist in the CDG-credit card wars, given that unlike some countries, surcharges are very rare in Singapore.

Why does CDG persist with these? Simply put: because they can. With such dominant control over the taxi industry in Singapore, CDG has the wherewithal to do as it pleases, and if you don’t like it, tough- say goodbye to more than 60% of the market. 

Aren’t credit card surcharges illegal? Let’s be careful with our terminology. Credit card surcharges are not “illegal” in Singapore, in the sense that you can’t go to the police and file a report. They are, however, a violation of the service agreement that exists between card issuers and the merchant.

Surcharging remains prohibited outside the U.S. unless there is a local law or variance that requires merchants be permitted to engage in the practice.

-Visa International

Yet that hasn’t stopped bigger merchants from flexing their bargaining power. Back in September 2021, Amazon imposed a 0.5% surcharge on Visa card transactions, which remained in effect until a deal was reached in February 2022. YouTrip still imposes a 1.5% service fee on Visa credit card top-ups. And who can forget Singapore Airlines’ ill-advised attempt to add a 1.3% surcharge on Economy Lite fares back in 2018? 

It’s clear that there’s one set of rules for the small fry, and another for the big boys.

Conclusion

CDG has reimposed a 10% surcharge for street hail bookings paid through its Zig app. This applies to all cards except DBS/POSB, which has managed to secure a waiver till the end of 2023. 

That’s good, because most miles chasers should be using the DBS Woman’s World Card to pay via Zig anyway (or, if making pre-bookings, do it via Kris+). Still, it points to the continued inability of card companies to reign in CDG. 

“We are very disappointed that we’ve not been able to remove or reduce the 10 per cent surcharge, after a longstanding discussion with ComfortDelGro. We continue to oppose the practice of surcharging.”

-Visa Country Manager (2015)

In a way, Visa’s approach reminds me of Apu in the Simpsons: “Hey! Hey! Hey! I have asked you nicely not to mangle my merchandise. You leave me no choice but to…ask you nicely again.”