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Grab offers an Upfront Cash Programme that lets select drivers and food delivery partners take a cash advance on their future earnings, and pay it back in weekly instalments.

Here’s how it works in a glance:

  • Drivers/food delivery partners in the programme will be offered a maximum amount that they can apply for. This amount is decided based on their earning pattern, and constantly updated to their latest earnings.
  • When they apply to take out an advance, applicants can choose a duration of up to 26 weeks to split up the repayment.
  • Grab will automatically deduct funds from the driver/food delivery partner’s in-app wallet once a week, until the amount is fully settled.
  • There is no interest charged.
  • However, drivers/food delivery partners must pay a one-time administration fee when they apply. The fee is derived from a variable percentage of the amount of advance they have chosen to take. Grab says this ranges between 5% and 10%.

Authorities Concerned About Drivers Who Can’t Pay

Grab has only offered this scheme to “a small group” of drivers and food delivery partners with consistently “good historical earnings”, to avoid the risk that people will struggle to pay back after joining the programme.

Regardless, Singapore authorities have expressed their concerns about this scheme.

The Ministry of Law said it is currently “seeking further information” about the programme and working with relevant agencies to “ascertain the applicable legislation”.

Deputy Chairman of the Government Parliamentary Committee of Manpower, Zainal Sapari, expressed worry that some drivers may end up in financial distress if they are unable to repay Grab.

If this happens, he thinks it could affect their freedom of choice to find alternative employment.

I hope Grab does not use this scheme as a way to retain or bind their workers to continue working as their rider or driver.

Zainal Sapari, Deputy Chairman, Government Parliamentary Committee of Manpower

This line in particular resonated with some drivers, especially those who have allegedly used the Upfront Cash Programme and later experienced difficulties.

Drivers Hit By Lowered Incentives: Is This A Trap?

Zainal Sapari shared an email he received from one Grab driver on his Facebook page on 27 November 2019.

Singapore Grab driver complains about difficulties repaying Upfront Cash Programme after incentives change
Image Credit: Zainal Bin Sapari Facebook page

According to the post, the driver said that he/she had taken out a cash advance from Grab, which he/she refers to as a loan, after being offered to join the programme three times.

After taking an advance, the driver said he/she was then informed that Grab would be “lowering and replacing certain incentives”, which reduces his/her income by “about 30%”.

As a result, he/she had to drive 7 days a week “for the past few weeks” in order to pay Grab back and earn some income to pocket.

“I’m sure drivers who took up the loan [made the decision knowing they could pay it back] based on what they were earning before the incentives were [changed],” the driver wrote.

He/she perceives this scheme as a strategy that enables Grab to lower their incentives without losing drivers, because they are ‘locked in’ to continue driving to settle their repayment.

Beyond issues with the Upfront Cash Programme, the driver also shared about other difficulties like getting unequal job priority, and being ‘forced’ to accept jobs with bad fares to avoid temporary suspension on the app.

What Do Other Grab Drivers Have To Say About This?

After coming across this post, we reached out to a community of private-hire drivers on Facebook to hear about their experiences.

Drivers in the Upfront Cash Programme struggle to repay Grab as they're earning less when incentives are reduced
Screenshots from PHV Riders and Drivers Singapore Facebook group

A few of them shared similar sentiments with the driver who wrote the email, highlighting that dwindling incentives were making it harder than expected to fulfil repayment while trying to earn a living for themselves.

Drivers who agreed with this also shared the view that the Upfront Cash Programme works like a “trap” that allows Grab to tie down drivers.

The Other Perspective: A Good Source Of Financial Help

However, there are also drivers who say they have made use of the cash advance with no issues.

Grab driver does not face penalties or extra charges for making late repayment to Upfront Cash Programme
Screenshot from PHV Riders and Drivers Singapore Facebook group

One driver shared that he was late on several repayments, but did not experience any consequences or penalties.

He went on to add that he finds the programme helpful and “fuss free”.

There were also quite a number of drivers that expressed their support to Grab.

Instead of seeing the programme as something damaging, they think of it as a good option for drivers who are in urgent need of immediate funds, as long as they fully understand the payment terms.

Grab drivers support Upfront Cash Programme
Screenshots from Zainal Bin Sapari Facebook page, PHV Riders and Drivers Singapore Facebook group

One of the points they raised is that drivers who use the programme should not rely on incentives, as they are simply rewards offered on top of base earnings, and are always subject to change.

Some also debunk the concern that using the programme ties them down to Grab, as they note that drivers are actually free to find other sources of income if they wish to. They can then transfer funds into their Grab wallet to repay the advance.

Drivers Are Not Stuck With Grab

In response to the ongoing debate, a Grab spokesperson told Vulcan Post that the purpose of the Upfront Cash Programme is to “assist [their] partners in situations like family emergencies, or when they need to pay for children’s education, or for [household purchases]”.

“Partners who are unable to earn and return their incentives for any reasons are encouraged to contact Grab as we have a dedicated team who can help them on a case-by-case basis. This includes enabling partners to return their incentives via bank transfer and/or means other than through the Grab App,” they said.

Grab added that “a few hundred” drivers/food delivery partners who opted in for the programme “have decided to stop driving for the platform in the past month”, and arranged to repay their advances via alternative methods.

Since launch, some 97% of the incentive amounts paid out to partners under the Upfront Cash Programme were returned in a timely manner. Grab monitors the programme closely and will continue to ensure that our partners can benefit from the programme.

Grab spokesperson

Set Up Rules To Keep It On Track

Overall, the Upfront Cash Programme can be beneficial to Grab drivers and food delivery partners for a number of reasons.

Its one-time administration fee is indicated from the start, after which there is no interest, hidden fees, or penalties for late payments.

Compared to typical interest rates on loans from banks, which can range from about 5% to 25%, Grab’s admin fee (5% to 10%) is on the cheaper end, which makes the programme more accessible for those with cashflow difficulties.

Ultimately, if drivers are able to choose other forms of employment while they settle their repayment, the programme doesn’t really cause any restrictions.

However, it may be worth noting that there are some limitations to the programme.

For example, Grab can only assess their drivers’ eligibility based on their historical earnings within the app. They would not have access to drivers’ credit history to determine their creditworthiness, and would also not know if a driver has other liabilities to repay elsewhere.

Grab is also currently not being regulated on how they set their administration fees, or how they change incentive structures after drivers have taken an advance amount that was approved based on their previous earnings.

If Singapore authorities decide to put some parameters in place to regulate how Grab carries this out, it would help ensure that the programme stays useful for drivers who are in need of financial support.

Featured Image Credit: The Pride – Singapore Kindness Movement / PHV Riders and Drivers Singapore Facebook Group

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© 2021 GRVTY Media Pte. Ltd.
(UEN 201431998C.)

Vulcan Post aims to be the knowledge hub of Singapore and Malaysia.

© 2021 GRVTY Media Pte. Ltd.
(UEN 201431998C.)