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Grab: Ride Sharing Business Model

by Mariya Parackal
Grab sg website

Grab is a Singapore-based company, which is Southeast Asia’s leading ride-hailing platform that offers ride-sharing, food delivery services, booking services for taxis, private cars, motorbikes, car-pooling, shuttle services, bicycle-sharing through a single app.

Anthony Tan and Tan Hooi Ling rolled out GrabTaxi in Malaysia in 2012, later in 2016, they rebranded GrabTaxi into Grab. Within a span of seven years, Grab has taken its ride-hailing service growth across eight countries in Southeast Asia. The big moment of Grab was in 2018 when they acquired Uber’s Southeast Asia’s entire ride-hailing service.

With Grab, one can swipe into its mobile-based application to hire anything on wheels. Average daily rides in Grab are 6 Million with more than 2.8 Million drivers. Now Grab is providing everything in the consumer service sector and they have invaded multiple services like hotel booking service, On-Demand video platform, food ordering, ticket purchasing, trip planning, and grocery shopping. 

What Does Grab SuperApp Offer?

In 2016, Grab launched its QR-code-based mobile payment GrabPay which is available in six southeast regions. Besides Grab rides, GrabPay allows consumers to pay online for making a purchase in eCommerce platforms and can also be used in food delivery or fund transfer. Grab is also providing loans to small-medium enterprises and micro-insurance to drivers in Singapore. Grab has built a merchants network that consists of more than 600,000 merchants. 

Finally, GrabPay offers a ‘Pay Later’ option, a post-paid or installment payment that allows customers to pay at the end of the month for Grab services without any additional cost. 

How do GrabTaxi works?

The functions of Grab is similar to Uber and Lyft. Grab is a simple application for a client to use. 

  • Input a get and drop-off address
  • When the application finds a nearby driver, confirm the request and from the minute you can track the area of the driver and can see an approximate time to reach you. 

The 3 Steps Grab taken to conquer Southeast Asia:

Among the many steps Grab has taken to get a strong foothold in ASEAN nations, here are 3 main ones:

  • Meet Local Requirements
  • Solve Local Problems
  • Have a hyperlocal outreach

How does Grab SuperApp make money?

Grab takes a commission of 16% – 25% for use of their services. In Malaysia, Grab has around 3.5 Million drivers, the minimum ride cost is RM5, after the 25% cut (RM1.25) the company will earn about RM4 Million revenue if every driver gets a confirmed ride.

The credits deposited by the driver will be deducted with a corresponding amount for every booking they complete. Last year Grab was giving $4.30 to $5.70 for each ride in Singapore, such incentives could cost the firm millions per month. Grab doesn’t deal with free or discounted rides to the passengers. 

Consider another example, the average gross earnings of a full-time (12 hours) driver in a month is $1435 – $1670. After a 25% commission cut, drivers will earn $1795 – $2088. Based on this, Grab would have gotten about $360 – $418 of commission from a single driver. 

How does Grab works for drivers?

Grab had built an infrastructure system for drivers to stay with them. The reward system consists of three levels. 

  1. Silver
  2. Gold
  3. Platinum

The driver will achieve Silver if he completes 60 plus rides in a month with benefits from GrabAuto reward. This reward results in discounts and offers with car maintenance services.  

When the driver completes 150 plus rides a month he will achieve Gold. It offers retail vouchers and lifestyle benefits. 

To reach platinum the driver needs to complete 300 plus rides a month. In addition to the above rewards, he will get extra earning privileges and even medical offers at certain centers. 

Grab also pays if:

  • You put an advertisement on your car, you can earn up to $84 per month. 
  • You refer a friend to be driver, earn $24 for each referral 

In this way, Grab is taking many measures to maintain their drivers. The offers will keep you driving for them. 

How to build an app similar to Grab?

So, if you are planning to build an app like GrabTaxi then here is an on-demand business model for ios and Android mobile app development. 

iScripts UberforX is an on-demand service platform that enables you to launch Uber-like on-demand services and marketplace for medical, health, automobile, food, maid, taxi, etc. 

Check out iScripts UberforX Demo

iScripts UberforX Live Demo

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