When in Rome: Singapore’s GrabTaxi explains why Uber is losing out in Asia

Singapore-based car-hailing app says key is to work with local governments, and that homegrown players in region win by understanding culture and customers of their domestic market.

PUBLISHED : Tuesday, 24 November, 2015, 7:16pm
UPDATED : Tuesday, 24 November, 2015, 7:59pm

Homegrown car-hailing apps in Asia are dominating their respective markets by focusing on the specific needs of consumers and working with local governments, according to Singapore-based GrabTaxi, offering clues as to why global players like Uber are failing to hit the mark.

“It is no coincidence that all the dominant players [in major markets in Asia] are local companies,” GrabTaxi CEO Anthony Tan told the South China Morning Post this week.

While San Francisco-based Uber has been aggressively expanding and fighting for market share in China, India and certain Southeast Asian countries, it often finds itself losing out to local rivals like China’s market-leading Didi Kuaidi and India’s Ola.

READ MORE: Car-hailing app Didi Kuaidi releases gov’t-backed index showing usage, user experience, traffic conditions in Chinese cities

Ola, which also offers various ride-hailing options, claims 80 per cent of its domestic market while GrabTaxi is the dominant player in Southeast Asia.

Tan, who was born in Malaysia, founded the company in 2012. It now serves more than 28 cities in six countries including Indonesia, Vietnam, the Philippines and Thailand.

He said companies like his perform so highly in their home markets due to a deeper understanding of the local culture and their customers’ needs.

One example of GrabTaxi’s localisation strategies would be how it accepts payments. While Uber primarily depends on credit cards, GrabTaxi prefers cash and this works well in a region where plastic is not usually the primary choice.

“The reason why we’ve been able to create and grow the lead is because … we grew up here, we understand the nuances of local communities,” he said.

GrabTaxi also emphases the safety of its services. Passenger safety remains a top concern among female passengers, especially in developing Southeast Asian countries.

“I started the company with my co-founder [with the aim of] solving safety problems for women and children [in transportation]”, said Tan.

The company rolled out safety features such as real-time ride tracking, which users can send to their friends and family, and a number-masking feature that allows drivers and passengers to call each other via the app without sharing personal mobile numbers.

According to Tan, eight in 10 women in emerging markets such as Indonesia, Malaysia, the Philippines, Thailand and Vietnam feel safer using taxis provided by GrabTaxi.

“Today, as the largest [ride-hailing] company in Southeast Asia … safety remains a core value [for GrabTaxi],” Tan added.

With over 160,000 registered drivers, the company claims to have the largest network in the region, which it claims results in peerless services.

“With the largest and fastest-growing land fleet, it means we have the largest coverage, the lowest expected time of arrival and the ability to cut poor quality drivers since we have so many drivers anyway,” said Tan.

While Uber, its chief rival in Southeast Asia, grapples with issues of legality in markets such as Vietnam and Thailand, GrabTaxi has managed to net government endorsements to run its operations in these markets.

“In Vietnam, we are the only [ride-hailing] app that is legal,” said Tan.

“In Phuket, Thailand, we launched with the [support of the] governor of Phuket … while our competitor was kicked out.”

“As a local within the region, we go in and work with the government, sharing information that helps them create policies that are pro-innovation and pro-consumer,” he added.

GrabTaxi recently received a boost by China’s Didi Kuaidi, which came on board as one of its investors in its latest US$350 million funding round.

Didi Kuaidi has been actively investing in ride-hailing companies, pouring US$100 million into US-based Lyft and, more recently, becoming an investor in the US$500 million funding round of India’s Ola, as the Chinese company works toward building an alliance against its biggest rival Uber.

“[Didi’s investment] is a clear endorsement of the way we operate … and we spend a lot of time sharing best practices and know-how with each other to build more strongly localised services that are most relevant to our people,” said Tan.