Grab drivers are technically ‘customers’, but not well-placed to bear GST hike

GRAB has drawn backlash with its decision to pass on the 1 per cent increase in goods and services tax (GST) to its drivers. The company announced last month that it will raise its commission rate for drivers from 20 per cent to 20.18 per cent, starting Jan 1, 2023.

This puts ride-hailing drivers in a difficult position. Unlike a large restaurant chain that works with GrabFood, for instance, drivers are not GST-registered. This would mean they cannot charge GST or make claims for GST costs. At the same time, they are price takers with little control over the fares charged to consumers.

It may seem counterintuitive that drivers should have to bear the GST hike, considering that they are providing a service to end-consumers. But Grab has highlighted that its drivers are in fact its customers. This is legally sound, said Ong Pei Ching, a partner at TSMP Law Corp.