To instill the value of inconvenience a ride cancellation causes for both drivers and passengers, Grab will now be penalizing those who cancel rides. The ride-hailing service is resorting to this method to make it easy for both drivers and riders. Since cancellations result in loss of earnings of drivers already on their way to pick up a passenger while a loss of trust of passengers waiting for their taxi to arrive.

Though, sometimes people cancel rides for some genuine reasons, Grab will initially levy charges once a cancellation threshold is reached. Over time, it will be putting a check on the threshold and modify it accordingly. It has decided to put on a charge of S$2 (US $1.40) if the number of cancellations exceeds 10 in a week.

Grab also measures drivers’ performance based on their cancellation rates, among other factors. Drivers with low cancellation rates enjoy higher incentives and perks, which makes them think twice before canceling.

The amount will be deducted from the passenger’s GrabPay account, those not using the payment service will have to first enable it and pay the amount to book the next ride. In the official release, Grab touts cancellation fee payment will be seamless with the usage of GrabPay. Also, to ensure transparency passengers will also get an e-receipt with the fee mentioned. The app will be sending numerous notices to the passengers before charging the amount.

The cab aggregator wants to motivate people to make a booking and stick with it. It says this is not a profit-drive initiative, the step is being taken to create a fair marketplace for the drivers and passengers. It also enables them to accurately predict the demand for drivers so they allocate rides more efficiently.

Uber imposes $10 if a passenger chooses to cancel a ride five minutes after a driver is assigned. Whereas, it charges $5 for cancellation of UberTAXI.

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