Singapore-Based GrabTaxi Bets Being Local Will Keep It Ahead of Global Players
As smartphones transform notions of mobility around the world, there’s value in a local approach, says Anthony Tan, CEO of GrabTaxi, a two-year-old company whose app helps coordinate taxi rides in a dozen cities in Southeast Asia.
GrabTaxi has been downloaded one million times, and claims 250,000 monthly users and 20,000 participating taxi drivers.
There are, or course, ride-hailing apps all over the world. GrabTaxi is a lot like Flywheel in the U.S. and Hailo in Europe, Tan admitted. It helps people use phones to hail licensed taxi drivers, rather than find community rides or arrange fancy black cars like Lyft and Uber.
“There are people who don’t believe in fixing a broken system. They want to abolish it,” Tan said. “My bet is that it’s not going to be easy to break these 100-year-old industries. You have to walk them through the process.”
Even as Uber aggressively expands across Asia, Tan thinks there are unique angles to providing services for the 600 million residents of Southeast Asia that only a Southeast Asian-focused company like his own is likely to realize.
For instance, GrabTaxi is particularly focused on safety features, like allowing riders to share their pick-up location and destination with someone at home during their ride. In part because of that focus, the app’s user base is 80 percent female.
Or another thing: “Ninety percent of Southeast Asia, outside of Singapore, runs on a pre-paid model for telcos,” Tan noted. “People buy a SIM card and top off.”
So GrabTaxi is pre-paid, too. Drivers buy up ride vouchers from the company in advance. Then they use up their tab bidding on new passenger requests. The fee is something like seven percent of the estimated fare, but it varies.
Passengers primarily pay their drivers in cash, though they can pay with credit cards if they prefer. “Only a fraction of the 600 million people have credit cards, so we don’t make it mandatory,” Tan said.
Tan earnestly said he sees his larger mission as poverty alleviation. He’s the scion of a family that owns a major Southeast Asian car sales company. He grew up living in Malaysia, Singapore, the United States, France, China and Hong Kong, and is funding GrabTaxi in part from his own personal wealth.
Tan is nominally based in Singapore but said he visits three to five countries per week. I believe him, after having tried to schedule a phone interview. He drives for GrabTaxi when he visits countries where he can speak the language — which is many of them.
Here’s another quirky GrabTaxi feature. There are 10,000 drivers on the service in Kuala Lumpur — that’s half of the city’s active driver population, according to Tan, in part because Kuala Lumpur is the company’s oldest market.
GrabTaxi runs background checks on its taxi drivers, which could get expensive, so Tan said he worked out a barter deal with the police department in Kuala Lumpur to get access to its database.
The Kuala Lumpur driver app includes a “civil crime watcher” function that helps drivers document crime and act as the police department’s eyes on the street. They take photos if they see something suspicious and submit them directly to local police.
But as much as existing in a certain place matters, GrabTaxi’s early success is just as much about existing at a certain time.
In 2011, Tan was part of a student team that placed second in a Harvard business plan competition with the original idea for GrabTaxi.
At the time of the original pitch, a smartphone cost at least $300. “Now, you can get a seven-inch Android tablet for $75,” Tan said with disbelief. That’s still a considerable amount for many drivers, so GrabTaxi tries to help arrange installment plans.
Mobile access is what makes this whole thing work, whether you’re in San Francisco or Bangkok. For Southeast Asia’s taxi drivers, the phone is the proverbial fishing rod, Tan said.