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Meet GrabCar, an Uber competitor for Asia

The car-booking service was touted as a complementary add-on for GrabTaxi's taxi booking app, but in practice, the flat hiring fees position it as competition for Uber Asia's transport network.

GrabCar will allow users to travel around Southeast Asia in style. Aloysius Low/CNET

GrabTaxi, a popular taxi booking app for Southeast Asia, has just launched a new service called GrabCar. While the GrabTaxi app lets users easily search for and book a cab without having to go through a specific taxi company's booking system, the GrabCar add-on allows users to book a premium car for a flat rate.

Unlike in western countries, taxis in Southeast Asia are a lot more regulated. In Singapore, for example, taxi drivers don't own the cab -- they lease a vehicle from an approved company and pay a daily rental fee.

This means that companies such as Uber, whose business model in some parts of the US relies on normal drivers wanting to make extra cash by turning their car into a taxi, have switched to a different model in Singapore -- by using licensed limo services instead.

However, this can result in a very expensive trip, and depending on traffic conditions, may result in a fee that's significantly higher than if you were to take a normal cab.

The new GrabCar service seems to take this into consideration, and while it uses limo operators, will only charge the user a flat fee depending on the distance and the time when you make the trip. A typical four-seater car will cost around S$50 ($40) a trip, though if you're travelling less than four kilometres, the price drops to S$38 ($30). There's also a midnight surcharge (12a.m. to 6 a.m.) of S$10 ($8).

A similar trip from Uber (not the low-cost UberX) may cost around S$47 to S$60 ($37 to $48). This is based on a fare quote from the Uber web site.

The GrabCar service is currently available in Kuala Lumpur, Singapore, Bangkok and Manilla. Users can select the GrabCar option from the app to book a car instead of a taxi. While the service mostly operates on a flat fee model, it seems that in Bangkok, GrabCar runs off a meter (just like a taxi) instead.