Automotive Grab

Published on March 28th, 2019 | by Subhash Nair


A Sensible Response to Grab’s Cancellation Policy

Grab’s recent Cancellation Fee policy sparked outrage with many users stating it was unfair on many levels.

One local business owner and friend of the site cut through the noise to give clear reasons why the cancellation fee, as justified as Grab thinks it is, should be removed altogether. Read his response below:

An open letter to Grab Malaysia

As a business owner, I understand that customers are not always right. I have witnessed my fair share of customers with selfish, entitled behaviour and I agree that measures needs to be taken to discourage, or even penalise such behaviour.

Also, when it comes to bona fide conflicts involving customers, I too will more likely side with my employee-stakeholders against that of the customers, especially so if it involves abusive or unreasonable customers.

However, your recent measure to charge a late cancellation/no show fee is a measure I find most unwise, and I would strongly advise your company to reverse the decision to prevent further backlash. Let me explain why:

1. Not every problem needs a solution

According to your head of operations, about 0.5% of your daily bookings are late cancellations. Assuming the figure is not inflated, that equates to 1 in every 200 bookings. With 4 million bookings a day, that is 20,000 late cancellations a day.

Presuming you have 200,000 active driver a day, (Figure derived from averaging 20 trips a day per productive driver on the Grab network) drivers affected by late cancellations is 0.1%, which means 200 out of 200,000 active drivers a day will experience late cancellation.

With Grab’s presence in 8 countries, even if we take the 200 affected drivers and divide by 8 equally, that is only 25 drivers in Malaysia affected by 1 late cancellation per day. This is hardly a problem requiring a solution. The detrimental effect of the penalty disproportionately outweighs its benefit.

2. It is not all about the money

Even if you run a tight ship and regard every problem as requiring a solution, you can opt for more subtle measures that does not include monetary deduction.

Grab app can prompt the customer before they late cancel a booking warning them of the potential ramifications that may include point deductions, not being entitled to discounts and special offers, showing a late cancellation/no show counter to drivers, demoting the rank acquired by a passenger. Even if monetary penalties are imposed, it could apply after x amount of strikes.

There is no shortage in methods to penalise late cancellation. A purely monetary penalty hints at either a lack of thought invested in the matter or even worst an indifference to the opinion of customers.

3. One mustn’t criticize others on grounds where he can’t stand perpendicular himself.

While I would side with my employees in most customer-employee conflicts, I would not do so if the fault lies with my employees. Similarly, penalising passengers for late cancellation or no show without addressing the rampant problem of drivers asking or forcing passengers to cancel their booking opens a can of worms that exposes Grab to a barrage of social media backlash that Grab has to date, yet to provide a satisfactory answer to.

I have experienced multiple occasions where drivers asked for cancellation or straight up did not bother to show up and kept the booking hanging in the hopes that I would cancel it instead.

The excuses for not showing up range from destination being too near, or too far, driver took a wrong turn or overshot the turn, or no cash to pump petrol in credit card bookings, that is if they answer at all. I spoke to many colleagues and friends and a large percentage of them experienced similar issues.

The worst part is that I have written to Grab twice to report these incidents and I did not even receive a courtesy acknowledgement to these complaints, let alone expectations of any actions being taken. Does Grab expect their customers to swallow whatever change of terms thrown our way and let this one slide?

4. Carrot and stick

The change in the cancellation terms penalises passengers automatically in the event of a late cancellation, irrespective of whether the fault lies with the passenger. The burden then falls onto the passenger to challenge the penalty if they verily believe that they are not at fault, presuming that Grab responds to all complaints that is.

While this burden is heavy, it would have drawn a lot less social media backlash if such burden is applied quid pro quo to Grab drivers as well. Example, should a driver cancel a booking after 5 minutes of hailing, RM3 to RM5 is charged to the driver and refunded to the passenger in their next ride.

Absurd and unworkable? Of course it is, but how can Grab consider that such penalties should apply to the passengers but not to the drivers who are often at fault in the cancellation of rides and wasting precious time of the passengers?

The behaviour of Grab is symptomatic of a company nearing complete monopoly over the market. Ride sharing services must remember that it is the arrogance of the taxi service companies that allows the market to be disrupted by Uber and Grab originally, and the same disruption can be done to Grab as well.

In the mean time, I will be using Grab’s competitors for my commute.


About the Author

Written work on @subhashtag on instagram. Autophiles Malaysia on Youtube.

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