New ride-hailing firm Tada’s lower fares and zero drivers’ commissions – competition enough for Grab?

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Photo: YouTube screengrab MVL founder Kay Woo
 

The long-standing gripe of Grab’s customers has been the increase in fares after its merger with Uber. There were questions raised, and even the competition watchdog had to step in.

Grab & Uber – The competition watchdog finally speaks out and proposes financial penalties on both companies

On Thursday, another player joined the ride-hailing market, in the form of Tada. South Korean Kay Woo is the founder of MVL Foundation that operates Tada.

Tada entered local markets with 3,500 drivers on board and a unique feature of zero drivers’ commissions and lower peak-hour fares.

In comparison, Grab which levies a 20-per-cent commission fee on its private-hire car drivers. However, Tada charges a transaction fee of between 3.4 per cent and 5 per cent on credit-card payments, which goes to the payment gateway Stripe.

It seems Tada’s zero drivers’ commission has also sparked a reaction from other players in the ride-hailing market. While another firm Jugnoo, does not charge its drivers a commission either, it had plans to eventually levy a 10-per-cent fee after six months. With the entrance of Tada, its chief executive Samar Singla told media that “looking at the competition, we might extend the no-commission plan for a year”.

Many Singaporeans have raised questions as to how Tada runs its operations now. One of the ways in which the company plans to make money is through data. It gathers data on users’ app usage, and with their consent aims to sell the data o driving research laboratories or insurers.

Mr Woo, said that there are “multiple, different business models” that can be explored. He also added that the company was not seeking profits, and that part of its revenue will defray operational costs, such as the wages of staff members and founders, with the rest distributed to drivers and customers in incentives.

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obbana@theindependent.sg