New ride-hailing app Jugnoo lets drivers bid a price for rides

Singapore

NEW ride-hailing player Jugnoo isn't interested in being a Grab or Uber. It wants to be a niche player in Singapore and is introducing a unique "reverse bidding" ride-hailing model that aims to give more control to drivers and commuters.

Samar Singla, chief and co-founder of Jugnoo, told The Business Times: "A big problem in the world is that commuters and drivers don't really have control over pricing, especially surge pricing. Too much control lies with the ride-hailing companies.

"Sometimes it feels that the algorithm is trying to take advantage of the situation. For example, if I've cancelled a driver too many times while booking a ride, I get higher prices for the same ride. In another example, when my phone battery is low, I typically get higher prices."

This has led to many frustrated commuters and confused drivers, and a general feeling of being exploited, he said. "We want to have that feeling removed."

Jugnoo's reverse bidding model works like this: when a commuter requests a ride, drivers in the vicinity can bid a price for the ride. Jugnoo's app will suggest three prices - an algorithm-determined price, another that is 10 per cent higher, and a third that is 10 per cent lower.

Drivers can also put in their own bids. Commuters then get to choose from a list of drivers based on price, driver rating and the time taken for the driver to reach them.

"Our thesis is that people want more control over their consumption habits. They don't want to be controlled by companies. So a more open system to ride-hailing is needed."

When asked if Jugnoo's model then puts drivers in a position to exploit commuters, Mr Singla said: "Yes, but in a free market, market dynamics will force the fares to be competitive. Drivers who bid later can only bid lower than the last lowest bid. Exploitation will not happen."

Jugnoo will launch in Singapore on May 1 with a target of 500 drivers. For the first six months, it will be free to use. After six months, Jugnoo will charge a 10 per cent commission on every ride, which will be equally borne by the driver and commuter.

Asked why Jugnoo chose to introduce its reverse bidding model, Mr Singla said: "The market here is very evolved. People are educated, have high purchasing power and understand their rights very well. Singapore is the right place to experiment with this new model before we launch it to the rest of the world."

The India-headquartered company is believed to be that country's third largest ride-hailing player, and profitable to boot. When it launches here, the hope is for Jugnoo is get 10 per cent market share, said Mr Singla.

As part of efforts to keep costs low, Jugnoo plans to have only one person in its Singapore team, Mr Singla said. "We are a pure tech product - everything happens through our app.

"We are a niche product. Our goal is very different from that of Grab and Uber, which are very aggressive. We believe in being run more sustainably.

"We don't plan to offer promotions or discounts, or do a lot of marketing to acquire customers. We will also keep driver commissions low.

"It's a little bit of a contrarian strategy, but it's worked for us."

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