DBS Group Research analysts have maintained “buy” on ComfortDelGro C52 (CDG) following Gojek’s newly-announced commission cutting move.
The Indonesian ride-hailing player recently announced that it plans to lower driver commissions in Singapore from 15% to 10%, effective Nov 1 to at least the end of 2024. This is likely an attempt to attract drivers into its platform amid supply crunch in the point-to-point transport sector, the analysts note.
GoTo’s Gojek had previously raised its driver commission in Singapore to 15% in February. Pre-pandemic, the driver commission was 20% before it was cut to 10% in June 2021.
The planned 10% commission is on par with the CDG’s commission for private hire drivers with their own vehicles via the company’s ride-hailing platform, Zig. It is also higher than Zig’s platform commission for private hire drivers who leased vehicles from CDG (8%) and CDG taxi drivers (5%). The ride-hailing leader Grab, on the other hand, charges its drivers a commission of up to 20.18%.
As such, CDG’s drivers commission continues to remain competitive, DBS analysts highlight. “Nonetheless, we believe this lower commission from Gojek could potentially push back plans to increase commission rates in order to remain competitive.
“While the ride-hailing environment will be more competitive in the short term, we are positive in the medium to long-term with a view that this will attenuate over time,” the analysts add.
The analysts are keeping their target price for CDG at $1.65.
As at 10.51am, shares in CDG are trading at an unchanged $1.29.
