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Commentary: With Grab’s super app ambitions, who will it eat for lunch?

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28.10.2018

SINGAPORE: In just over six years since its founding, Grab has grown tremendously.

Despite being a late entrant, it beat Uber, its multinational rival.

GROWING AMBITIONS

Like many start-ups such as Tencent in China and Go-Jek in Indonesia, Grab’s ambitions didn’t stop at being a leading player in the shared transport space.

Its burgeoning ambitions has now led it to expand into food delivery and payments, among other services.

This expansion has shown early promise, at least in terms of growth in partners, for instance the number of restaurants on GrabFood, and customers, for GrabPay.

Grab’s initial success on these counts raises uncomfortable questions of what comes next for Grab and what its expansion means for consumers.

There was considerable alarm over Grab’s potential monopoly power when news of its acquisition of Uber’s Southeast Asian businesses sent shockwaves across the region, and the acquisition incurred fines from the Competition and Consumer Commission of Singapore (CCCS).

No doubt Grab’s plan for a rapid proliferation of services under the Grab umbrella may have huge implications for consumers and consumers may be suitably worried.

Grab's R&D Centre at Marina One. (File photo: TODAY/Koh Mui Fong)

SHARED TRANSPORT CONTINUES TO BE A FLASHPOINT WITH CONSUMERS AND DRIVERS

In the shared transport space, the more popular an app, the more attractive it is for its drivers and consumers, given network effects. Hence there tends to be consolidation of market share, which is what caused concern for CCCS and consumers.

Grab has since taken some mitigating steps, at least in terms of offering better terms to drivers, including guaranteed income for meeting specific targets, announced just last week.

Yet prices apparently have risen by 10 to 15 per cent and stayed that way because of fewer promo codes and less attractive rewards, which is what alarmed the CCCS and led it to require that Grab remove the clause of exclusivity for Grab drivers.

So, shared transport will remain a flashpoint for Grab given its unbeatable market share even as it tries to make amends to regain trust with commuters and drivers.

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© Channel NewsAsia