Grab: Minimal changes in ride hailing prices as govt reintroduces new tax regime in Sept

KUALA LUMPUR (June 20): Ride hailing services provider Grab does not expect much changes in the pricing of its products once the new sales and services tax (SST) regime starts in September, said its country head for Malaysia Sean Goh.

“We don’t have details on the impact of the tax yet, but currently we don’t expect much changes in the pricing as yet,” Goh told reporters after attending the launch of In-Car Media Platform here today.

Last month, the Finance Ministry announced that the government will reintroduce the SST from September, which will replace the highly unpopular 6% goods and services tax.

On whether Grab will absorb the excess cost arising from the implementation of the new tax regime, Goh said, “Grab is still studying its options.”

“But in the past, we absorbed the 6% GST,” he added.

To optimise its operations, Goh said Grab is looking to displace the cost within its operating system as much as possible.

“If we want our drivers to earn more, one of the ways to do (that) is to help them generate ancillary income,” he said, adding that Grab is closely monitoring the development in the tax space which could impact its drivers and consumers.

To assess the impact of the new tax regime, Goh said Grab will be looking at various parameters such as passenger availability and the drivers.

“When it comes to tax, we see that if we absorb the cost and don’t increase the price, then there [are] not enough cars to support our operations,” he added.

So far, Goh said Grab does not see any issues related to anti-competitive practices, as it is operating in the two sides of the marketplace.

After Uber merged with Grab, Goh said the competitive issue cropped up as the public thought that the merged entity will increase the price of its ride hailing services, while its drivers could be forced to work more for less earnings.

“However, in our ecosystem, I can tell you that it is very hard to actually become anti-competitive,” he said, noting that Grab strikes a balanced approach in its operating ecosystem, particularly in dealing with its drivers and consumers.

“If at all, our biggest competitor is actually the car owners. The ratio is quite ridiculous,” he said, adding that Grab aims to increase the utilisation of costly assets, which in turn will boost efficiency.

At the same time, Goh is unfazed by the government’s plan to raise the monthly minimum wage rate to RM1,500 per month from RM1,000 currently.

“Our drivers earn well above the average in Malaysia. In fact, many of our drivers are (working) on part-time basis, and [work for] Grab to supplement their income,” he added.

Separately, Grab is partnering with Media Prima Bhd to roll out the In-Car Media Platform, which include various short-form content that are well suited for in-transit viewing.

The partnership was formalised today after Grab inked a memorandum of understanding with Media Prima Digital.

Under the deal, Goh said Grab passengers can now enjoy weekly doses of fresh updates on four dedicated segments: entertainment, lifestyle, sports and news.