From a start-up to Southeast Asia’s largest ride-hailing company in five years: Grab Malaysia country head Sean Goh tells us how
What was the inspiration behind the setting up of Grab?
Grab started off as My Teksi in 2012 when our founders Tan Hooi Ling and Anthony Tan realised that people couldn't rely on the Malaysian taxi system. Passengers were unable to get taxis when needed and were concerned about being ripped off. Taxi drivers, on the other hand, struggled to earn a living and spent hours idly waiting for passengers. Even though both supply and demand for taxis were high, the poor matching process of the radio dispatch system led to significant inefficiencies.
Our founders wanted to revitalise the taxi industry. The goal was to improve the safety and efficiency of our taxis by leveraging on the advancements of GPS and mobile technology. Part of it is the need to develop a service that would help passengers book taxis quicker, safer and more efficiently while helping taxi drivers improve their income by increasing their job potentials.
Today, we are the largest land transport brand in Southeast Asia. The prevalent problem in Southeast Asia is helping commuters navigate traffic congestion. As such, we have expanded to offer the most number of transport services at all price points and these include multiple complementary transport services including taxis, private cars, motorcycle taxis, carpool and beta services such as a delivery service and food delivery. In Malaysia, we are now the ride hailing service with the largest network with a presence in 25 cities across the country.
There is no denying Grab’s popularity in Southeast Asia. What is Grab’s strategy in the region that was so successful in capturing market share?
We have been successful in Southeast Asia because Grab has been focused in providing real and relevant solutions to solve local transport issues. Secondly, we are tapping into the potential growth of the digital economy and transport development and its need for efficiency in the region. With these in mind, we are able to stay laser-focused to strengthen our presence with these key strategies.
Our concern for safety, easy accessibility at an affordable price and improving driver-partners’ welfare is key in all the countries we operate in. However, tackling the issues requires a customised approach. For example, in countries or cities with heavy congestion like Manila and Thailand, GrabBike has been most effective and a popular alternative. Since its launch, GrabBike is the fastest growing vertical on our platform. In countries like Singapore and especially Malaysia, where car ownership is the third highest in the world, shared mobility like GrabShare, GrabShuttle or GrabCoach is gaining popularity where we are able to maximise the number of cars on the road to move large groups of people at a fraction of the cost.
Apart from that, we aim to be the number one mobile payments solution in Southeast Asia with GrabPay. A large portion of SEA’s 620 million people remain unbanked and continue to use cash. Many companies out there are still trying to get a foothold in the mobile payments space but with our wide presence here, we are well-positioned to get ahead. We have a huge 70 percent market share in private transport such as cars and bikes which are already using the Grab app daily to pay for ride services.
To help us get ahead and to ensure loyalty, we have embarked on several initiatives. Firstly, GrabPay Credits, our top-up stored value option launched in December last year. While not fully implemented in Malaysia, regionally, it has grown 90 percent month-on-month, clearly indicating a demand. Secondly, we have acquired Kudo, the leading online-to-offline e-commerce company in Indonesia, to assist in buying products online by paying cash to agents in their towns. Through the acquisition, we’ve extended GrabPay to over 500 cities in Indonesia with 400,000 agents. Lastly, GrabRewards is a passenger loyalty programme where passengers can ride to earn points to redeem for rides or rewards from a variety of lifestyle, retail and hospitality brands.
We also believe in fostering strategic partnerships that are mutually beneficial while adding value to the people we serve. For our passengers, we continuously seek interesting and unique partners like Fox Network and Magnum. Simultaneously, we seek partners that will help us reduce the driving cost for our hardworking drivers. We have partnered with PETRONAS Dagangan Berhad to enable GrabCar drivers to enjoy fuel savings, deals for lubricant, in-store Kedai Mesra promotions and earn reward points for all purchases at PETRONAS stations nationwide. We have also signed with PERODUA Sales Sdn Bhd to offer exclusive packages for those interested to drive for Grab but don’t have a car.
What have been some of the challenges in getting Grab to where it is now?
Five years ago, we started with just a handful of employees and less than 50 taxi drivers in Malaysia. Today, we are expanding in the SEA market in ways we can never imagine with a fleet of almost 1.1 million-strong drivers, dedicated to providing not just a service, but going the extra mile for our customers. This has made Grab a preferred transport option in the region.
Looking back, a major challenge was when ride-hailing was an uncharted territory with no regulations governing it. Hence, it was imperative for us to engage the authorities to share our vision to improve the transportation industry. This is an initiative we still practise till today in any country or city we are in.
Our journey to this point has not been a bed of roses and has required us to weather several hiccups including seeking talent. We had to look for people who were equally passionate and crazy enough to share our vision with the right skills to help us take Grab further. Grab is now made up of an equal number of men and women from various backgrounds. Our team speaks more than 30 languages and dialects and we have local teams in every country to understand each market better. Secondly, it was also about convincing people to change their habits – for drivers, to consider using an app as a tool to find passengers; and for passengers, the safety of an app to book rides.
As a data-driven company, it was also important for us to remain pliable and not be afraid to disrupt ourselves. In doing so, we need to maximise data to help us scale our business and make transportation accessible to all. Moreover, the advancement of technology and the support of our engineering hub have helped us to fortify our position as a strong technology-based company and innovate according to the transport industry’s needs.
Uber has been hit by a wave of negative publicity in the last few months. Has this benefitted Grab?
We are not the only ride hailing service in the global market, and we share similar concerns and challenges; therefore, we are able to learn from each other and better ourselves. As (founder) Anthony always says, iron sharpens iron, therefore, competition helps us stay sharp and focused on our mission and reminds us why we do what we do. With that in mind, we are leading in this region because we have a tailored approach in every city we operate in. We know the families and loved ones of our very own travel and drive with Grab. In all that we do, we have their best interest in mind.
Is the ride-sharing business sustainable? Where do you see its future?
Our founder, Hooi Ling, shared at the World Economic Forum a few months ago that one of the ways Grab can remain sustainable is by viewing the business with 3Ps – People, Profit and Planet Earth. To-date, we’ve been unique in Southeast Asia in offering multi-modal options – taxis, cars, bikes etc. and our strategy has been effective with up to 2.5 million daily rides; 1-in-3 users use multiple services and an estimated 70 percent market share in private vehicles. Our next steps are to capitalise on shared mobility via services like Hitch, Share, Coach and Shuttle, which we have already started laying the foundations. We are constantly working on improving our matching algorithm for the best driver/passenger experience so that we can improve efficiency and reduce carbon footprint. Secondly, strategic partnership will help us reduce the cost of driving to make it more profitable for our partners, and thirdly, it’s about moving Southeast Asia to be more tech and digital economically savvy.
How do you see Grab evolving in the future? Will it take another form?
Mobile payment is a small market here and one that we want to capitalise significantly. In addition, we also see ourselves tapping into the significant number of car ownerships in the region by increasing opportunities for shared mobility.
What do you think will happen to traditional taxi operators in Malaysia? Will we see the end of them?
The transportation industry is going through exciting times right now. As mentioned, the bill that is being tabled is a sign that the government is embracing technology and the benefits it brings to improve the transport infrastructure to benefit the people. Grab first began as a taxi hailing service; therefore, the taxi industry is very much part of our infrastructure. We are constantly in discussions with the authorities to improve the taxi industry and are also engaging our fellow GrabTaxi drivers to take the service to the next level. We are ever willing to work with any taxi companies who share our goal and mission in this area.