Citing the inconvenience created by riders or drivers cancelling their bookings, Grab announced today it is introducing a fee of S$2 (US$1.40) for people that cancel excessively.

To start, riders will be charged only after cancelling more than 10 rides in a week and the money will be taken from the person’s GrabPay account.

If the user is not on GrabPay and is fined the S$2, they will need to activate GrabPay and pay the fee before being able to use Grab again.

Grab says it will review and adjust the cancellation threshold over time.

“Cancellations made by drivers or passengers cause huge inconveniences to one another — loss of earnings or drivers already en-route to pick up a passenger and loss of trust for passengers waiting for their ride to arrive,” read the statement issued by Grab.

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The goal is to lower cancellation rates and improve the matching of drivers with riders who actually need a ride — and are not simply ‘racing’ all the various ride-hailing platforms, a fairly common practice.

Part of the initiative is designed to help drivers because one metric they are judged on is cancellation rate. So, if a driver is dinged by someone who constantly cancels rides, it would hurt the performance perks they receive.

Uber’s policy

For comparison, Uber’s cancellation policy levies a US$10 cancellation fee if a user cancels their ride over 5 minutes after a driver has been assigned. For the uberTAXI service, the cancellation fee is US$5.

Uber cancellation fees are waved if the driver is taking a long time to arrive at the pickup point.