Slightly more than a year after Grab Singapore first introduced an upfront cash program to pay its drivers and riders a sum of their earnings in advance, the scheme is being dropped amid concerns that it is a form of money lending and leaves drivers and riders open to potentially unfair terms. Money lending is heavily regulated in Singapore, with lenders required to hold a licence and strict caps placed on the amount that can be loaned.

On the one hand, various drivers and riders have claimed they benefited from the scheme, which charged them an admin fee and automatically deducted repayments from their earnings over a maximum of one year. Many of these workers might have been unable to obtain such small, immediate loans through the traditional banking system. But on the other hand, just as many stories have surfaced about drivers and riders who faced difficulties repaying the amount, sometimes because of changes to the Grab fare structure that affected their income.

Members of Parliament who heard from the latter group have voiced their concerns about the cash advance practice over the last few months, and the Ministry of Law has been looking into the legality of the scheme. In November 2019, Zainal Sapari, the deputy chairman of the Government Parliamentary Committee of Manpower, said he had concerns about whether workers who took advantage of the Grab cash advance might end up in financial distress or even have difficulty finding alternative employment. Just last Tuesday, another MP raised questions about whether Grab, which does not hold a money lending licence, was even allowed to provide the advance in the first place.

Grab has partnered with Singtel to apply for one of the five digital banking licences that the Monetary Authority of Singapore plans to grant. If successful, the ride-hailing firm would then be able to legally offer actual loans to SMEs and consumers, presumably including their own drivers and riders. However, in doing so it would also have to abide by banking sector regulations.