no brand loyalty. If it’s on sale, I’ll buy it. Now that I think of it
though, that probably explains why my tastebuds have gone on strike and
my bowels have been working overtime.
Because the truth is, it doesn’t always pay to be cheap. Take public
transport for example. We all know taking the MRT is cheaper than a
taxi, but if you’re heading out with family or colleagues, a taxi ride
may be cheaper than taking the MRT, and you get to enjoy the convenience
it brings too.
And now with Grab and Uber recently reducing their fares, it’s a good
opportunity to find out what’s the cheapest option among the three, and
in what scenarios.
First, let’s recall how each option charges commuters per trip
We know that there are several taxi companies operating in Singapore, each having different base fares depending on which vehicle model
you ride in. We’ll use the cheapest base fare out there – the Comfort
Hyundai Sonata – to represent all taxis. Oher than the base fare, taxi
rides are charged in pretty much the same method, as follows:
| Comfort Hyundai Sonata Taxi | |
| Base fare (1km or less) | $3.20 |
| Every 400m thereafter or less up to 10km | $0.22 |
| Every 350m thereafter or less after 10km | $0.22 |
| Every 45 seconds of waiting or less | $0.22 |
| Peak Period Surcharge Monday to Friday (Except Public Holidays): 6.00am – 9.29am Monday to Sunday & Public Holidays: 6.00pm – 11.59pm |
25% of metered fare |
| Midnight – Before 5.59am | 50% of metered fare |
In the middle of April, Uber announced that UberX fares would be reduced by about 15%. Here’s how the breakdown looks like after the fare reduction:
| UberX | |
| Base fare | $3.00 |
| Per kilometre | $0.45 |
| Per minute | $0.20 |
In response to Uber’s fare reduction, Grab also decided to reduce
their fares, even removing the minimum fare cap of $8 altogether. Here’s
how Grab’s fare structure now looks like:
| GrabCar Economy | |
| Base fare | $3.00 |
| Per kilometre | $0.80 |
Okay, now that we know how each charges, let’s look at three scenarios and find out which option is cheapest
Let’s look at three typical taxi journeys and find out how much each
service would cost us. Do note that for each comparison, we won’t
include ERP costs, since each service passes them on to the customer
anyway.
1. 8am journey from home in Potong Pasir to work in Raffles Place – 9.5km, 15 minutes
| Company | Fare Breakdown |
| Taxi (Comfort Hyundai Sonata) | Base Fare: $3.20 Metered Fare: $0.22 x (8.5km/400m) + $0.22 x (5 min/45s) = $4.68 + $1.48 = $6.16 Peak Hour Surcharge: $9.36 x 25% = $2.34 Total Fare: $3.20 + $6.16 + $2.34 = $11.70 |
| UberX | Base Fare: $3.00 Distance Fare: $0.45 x 9.5km = $4.28 Time Fare: $0.20 x 15 minutes = $3.00 Total Fare: $3.00 + $4.28 + $3.00 = $10.28 |
| GrabCar Economy | Base Fare: $3.00 Distance Fare: $0.80 x 9.5km= $7.60 Total Fare: $10.60 |
On the surface, it’s clear that the newly reduced UberX fares wins
this comparison by the slightest of margins. However, there are lots of
assumptions in the calculation, of course. For one, that there is no
traffic jam during your morning peak hour commute. Since taxis and UberX
both charge based on time taken, it would probably be safer to go with
GrabCar, which doesn’t charge you by the second.
That said, GrabCar does practice dynamic pricing, based on demand and
supply in the area at the point in time you make the booking. That
said, since you are already quoted the fare even before you book, there
should be no surprises.
Update 18 May 2016: Several readers have pointed out that Grab’s charges are rounded to the nearest dollar. In this case they should charge $11.
2. 1pm commute from office in Raffles Place to event in Bishan – 12km, 20 minutes
| Company | Fare Breakdown |
| Taxi (Comfort Hyundai Sonata) | Base Fare: $3.20 Metered Fare: $0.22 x (10km/400m) + $0.22 x (1km/350m) + $0.22 x (5 min/45s) = $5.50 + $0.63 + $1.47 = $7.60 Total Fare: $3.20 + $7.60 = $10.80 |
| UberX | Base Fare: $3.00 Distance Fare: $0.45 x 12km = $5.40 Time Fare: $0.20 x 20 minutes = $4.00 Total Fare: $3.00 + $5.40 + $4.00 = $12.40 |
| GrabCar Economy | Base Fare: $3.00 Distance Fare: $0.80 x 12km= $9.60 Total Fare: $12.60 |
To no one’s surprise, when there is no peak hour surcharge, taxi
fares emerge as significantly cheaper compared to the other two private
car companies.
Update 18 May 2016: Note that in this illustration,
the journey happens before 5pm. After 5pm, there is a $3 City Area
surcharge imposed by Comfort and CityCab taxis.
3. 12.30am ride from Clarke Quay to home in Potong Pasir – 8km, 12 minutes
| Company | Fare Breakdown |
| Taxi (Comfort Hyundai Sonata) | Base Fare: $3.20 Metered Fare: $0.22 x (7km/400m) + $0.22 x (3 min/45s) = $3.85 + $0.88 = $4.73 Midnight surcharge = $7.93 x 50% = $3.97 Total Fare: $3.20 + $4.73 + $3.97 = $11.90 |
| UberX | Base Fare: $3.00 Distance Fare: $0.45 x 8km = $3.60 Time Fare: $0.20 x 12 minutes = $2.40 Total Fare: $3.00 + $3.60 + $2.40 = $9.00 |
| GrabCar Economy | Base Fare: $3.00 Distance Fare: $0.80 x 8km= $6.40 Total Fare: $9.40 |
After midnight, UberX is the clear winner, especially if your driver
can get you home in record time because of the relatively clear roads.
Do take note that UberX, like GrabCar, is subject to surge pricing,
which means that prices are temporarily inflated to ensure supply can
meet demand. The good news is that usually, from my experience, surge
pricing doesn’t last more than 3-5 minutes, unless you’re in a really
popular area.
Update 18 May 2016: Several readers have pointed out
when Uber charges to your credit card, it’s considered an overseas
transaction, so there will be additional fees charged by your bank per
transaction. We’ll be doing a more in-depth article about this soon, so
follow us on Facebook. We agree with reader M S Ong that in the spirit
of being cheapskate, consider the cash payment option instead.
So which is the best service to use?
In each of the three scenarios, there is a different winner, despite the fare reductions.
GrabCar Economy is usually best for journeys when
there is a risk of traffic jams, presuming that Grab’s dynamic pricing
formula doesn’t already factor that extra traveling time in.
Taxis are best for journeys where there is no
surcharge, which means between 9.30am and 6pm on weekdays and 6am to 6pm
on weekends and public holidays. Do note that depending on the taxi
model, you might end up paying slightly more, but not enough to warrant
taking a private car.
UberX is the best option for rides after midnight,
which is nice to know, especially since most public transport operations
would have ceased by then. Look out for the surge pricing that usually
happens during these times, but remember that they normally don’t last
too long.
Ultimately, the fare reductions seem to have resulted in a more fair
playing field for consumers, resulting in lower transport costs
regardless of when your journey begins.
Do you agree with this assessment? Has your experience with
taxis, GrabCar Economy and UberX been different? We want to hear from
you.
