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Why Gojek's SG$0.70 platform fee flak wasn't about price

Why Gojek's SG$0.70 platform fee flak wasn't about price

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Singaporeans are a price conscious bunch of consumers. Hence, when Gojek unveiled a bew platform fee of SG$0.70 applied on every trip, it wasn't surprising for us to see netizens taking to social media to express their frustrations.  While the ride hailing company said that the amount collected from passengers will go towards initiatives designed to improve the experience for customers and driver-partners, it didn't however reveal what these enhancements or initiatives may be.

A quick check by Marketing found that netizens were not totally convinced on why the Indonesian player was asking consumers to pay a platform fee. One particular netizen questioned why passengers have to “fund” for improvement services, and why investors’ funding isn't being tapped on instead. Another passenger called out Gojek for charging a fee without revealing the details of its plans  “You are just going to push some of us away as you jolly [well] know that your competitor issues points but you don't.... so you better go back to the drawing board and think again,” the netizen said.

Industry players Marketing spoke to said that while the levy is a very small amount, a transparency element was missing from its communications.  Kevin Kan, former managing director Asia of CRM and loyalty company Aimia said at the end of the day, regardless of how much the surcharge is, customer experience needs to be exceptional to keep customers coming back. 

In the eyes of consumers, without good or enhanced customer experience, there are always other options and services out there.

He added that the backlash for a mere SG$0.70 surcharge may be a result of consumers feeling “enough of surcharges”.  “There is a surcharge for everything these days, such as peak hour, use of credit cards, CBD zone or Changi Airport zone,” he said. Kan questioned if this additional charge would tackle the issue of drivers cancelling or not showing up. 

“By levying a surcharge, will these problems still exist? How does the customer experience improve with the SG$0.70 surcharge? I think passengers are expecting more concrete answers to their expectations,” Kan said.

However, he was quick to add:

The number one rule for excellent customer experience is to be transparent. 

“Without transparency, you will not be able to generate trust with the rider or consumer. Gojek needs to educate consumers about what it is doing to enhance customer experience. Yes, you are providing new features in the app to make additional stops but addressing basic issues faced by passengers would help alleviate rider backlash,” he explained. Kan, who is also currently the CEO of a Break Out Consulting Asia focused on transforming businesses through leadership coaching, also noted the backlash may just be the typical “complain” culture in Singapore.

Nonetheless, the move by Gojek is not an unexpected one, Kan said, adding that we are in an era where “user pays” is a norm for the convenience they receive. Moreover, there is precedent in the Singapore market where over a decade ago, when ComfortDelGro first started to accept credit card payments, it had a 10% surcharge for card payments and still does today. “The software and hardware upgrade required to fit the payment terminals into the taxis needed funding and the surcharge was a way of doing it. Consumer are paying for the convenience that enhancements give them,” Kan explained. 

Sanchit Mendiratta, chief growth officer at Happy Marketer said that he would support any initiative that makes the platform secure, improves customer experience and makes the overall ecosystem more sustainable for everyone.  However, he added that the timing might not be ideal. “Although, I do agree that multiple stops and improving driver training are hygiene aspects and not everyone would be comfortable paying an ‘additional levy’ especially during these current times, when the entire country needs to come together and do our bit to deal with COVID-19,” he explained. Mendiratta and the Happy Marketer team previously worked with the likes of both Gojek and its biggest competitor Grab. 

The backlash from netizens however, is not the first in Singapore. In July 2018, Grab faced a similar pushback from netizens over its GrabRewards loyalty programme. Netizens criticised the changes in Grab’s credit multiplier system when it came to its rewards points. This eventually caused the ride hailing company to switch back to its initial loyalty rewards and points system. 

Read also:
Gojek denies talk on Grab merger, calls reporting 'inaccurate'
Is Deliveroo's subscription model a recipe for success in loyalty?

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