Grab does carpooling
IT TOOK a while compared to its competitors, but Southeast Asia- based ride- hailing platform Grab has finally unveiled a version of carpooling — simultaneously launching the service in both the Philippines ( initially available in Metro Manila) and Malaysia.
Dubbed GrabShare, the “ondemand carpooling service,” according to a release, was “conceptualized, designed, and engineered across [company] research centers in Singapore, Seattle, and Beijing.” First rolled out in Singapore in December last year, GrabShare distinguishes itself by guaranteeing a maximum of one additional stop — promising speed and convenience along with affordability. Compared to GrabCar (sedan) rates, the carpooling service is cheaper by up to 30%, with fares fixed and displayed up front.
Passengers can also ride with a companion with no extra fee so long as they have a common pickup and drop-off point. An additional benefit is that this service is limited to two stops per trip. “[They] can expect no more than one additional drop- off during their ride. This ensures everyone reaches his [destination] fast for less. Drivers will wait up to five minutes for each passenger during pickups,” said Grab.
In an exclusive interview, Grab Philippines country head Brian Cu explained the company took its time after debuting the service in Singapore to “let the product settle in first and learn from that release.” Prior to the local introduction of GrabShare, the company “made sure that drivers were well trained on the interface and app [ both refreshed] for a pleasant experience for them and their passengers.”
Mr. Cu stressed that Grab focuses more keenly on its “partners” or drivers via incentives and commissions. In the case of the local rollout of GrabShare, the local office had to meet with partners over the course of six to eight weeks to arrive at mutually acceptable rates. “We have two end users: the driver and the passenger. It’s not just always about the passenger. We need to take care of our partners, or else they will leave the system.”
The decision to pare down the number of carpool passengers was borne of local conditions. “If this was a country [without] traffic, and the roads are very well organized, it would be okay to share a ride. But it’s not the case. We have to localize the product and limit passengers — even if it means a loss of opportunity and income,” explained Mr. Cu.
Grab reports that around two million GrabShare rides have been completed over a total distance of 20 million kilometers. “Along with the rapid passenger adoption of GrabShare, Grab has seen a 15% improvement in its passenger matching rate. With more passenger bookings completed, drivers’ monthly incomes have also increased 10% on average,” narrated Grab Philippines.
As for the negative impression that Grab (and Uber) are killing the conventional taxi industry, Mr. Cu insisted that this is but a reflection of the free market at work, and the status quo will be part of the “new normal.” Having said that, the executive said that Grab willingly works with local regulators. “We want to be above board and follow what the regulators want.”
The pushback from the taxi sector though is real. “We have received letters from taxi groups, taxi operators sent to the LTFRB which the agency shared with us. [These letters] say that we’re illegal… Honestly, they have no case against the service that we’re offering. [Again] I think this is the new normal, but I believe that there’s still a space for taxis.”
Mr. Cu explained that, for instance, Grab doesn’t accommodate street hailing, which taxis do. “There will be a new balance. Before, it was 100% taxis. When Grab came into the market, some of the taxi riders switched, but it also created the new market.”
In this new market, Grab is actually styling itself as a helping hand. “We’re a technology solution platform, not a transport company,” Mr. Cu said. “One thing that we’re asking of the government is to use this technology on taxis as well — a more intelligent metering service for example — the way we can compute real-time demand, real-time traffic conditions. We’re analyzing so many more variables versus a normal analog meter.”
Instead of lamenting against Grab, taxi companies can, according to Mr. Cu, “just upgrade, use our pricing algorithm to enjoy the benefits of surge. No more contracts.”