This Versus That

Uber vs Grab vs Taxis: Which is the Cheapest Mode of Transport and When?

Peter Lin

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I’m a cheapskate, and proud of it. When I go grocery shopping, I have 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.

Image Credits:
Ian Fuller

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Peter Lin

I am the poster boy for reinventing one's self. I've been a broadcast journalist, technical writer, banking customer service officer and a Catholic friar. My life experiences have made me the most cynical idealist you'll ever meet, which is why I'm also the co-founder of a local pop culture website. I believe ignorance is not bliss, and that money is the root of all evil only if you allow it to be.