After announcing its beta launch in Thailand last week, cab-booking app, GrabTaxi officially announced its beta launch for Singapore last evening. The app that started as MyTeksi in Malaysia in June 2012, is now present in four countries – the fourth being the Philippines where it was launched in August this year.
The revenue model
The app is free to download and is available for the three major OSes – Android, iOS and Windows. GrabTaxi has yet to decide on the revenue model for Singapore. It could be a flat certain amount charged to a customer on a successful booking or a certain tiered percentage of the total fare of the trip.
Considering that Singapore has a well-connected public transport system – the MRT and the buses and even taxi drivers are largely expected to work on honesty, coming up with a right pricing model, which may not discourage the passengers from using the app, may be a little difficult. The same could come as a challenge in passenger registration amidst the presence of other taxi-booking apps like Uber.
“We are at an early stage where it’s important for us to drive numbers for both passenger and driver registrations. Once, we achieve that, we will be able to decide what the right pricing model for the city would be,” says Anthony Tan, Founder & Group CEO, GrabTaxi.
Meanwhile, the pricing model for GrabTaxi in Malaysia is on a tiered percentage basis – ranging between five to 10 percent of the taxi fare, in the Philippines, it charges the passenger 70 Pesos per passenger.
Do you like it? Safe, Fast & Now?
One prominent anomaly that catches the eye is GrabTaxi’s tagline in Singapore, which is I Like it Fast’. Shouldn’t it be ‘I Like It Safe’ instead? GrabTaxi seems to have done its homework well. The city is highly regulated and most drivers follow traffic rules, and otherwise too, Singapore is largely free of crime, and safety in travelling by cabs, even at late nights isn’t much of a concern here.
It’s the waiting time, particularity on a Friday evening that often gets frustrating.
Since the app promises a cab booking within a minute, it is positioned on ‘speed’ in the city. For countries like Malaysia, Philippines and Thailand, safety is the bigger concern, hence GrabTaxi is playing up on its ‘safe’ promise.
How does it do that? By screening, verifying, validating and training drivers. The passengers can share their trip with their friends and family members, who can track the trip on a map. The GPS-enabled feature, though not exclusive to GrabTaxi should come as a boon for late night passengers, particularly women, and in in countries, where safety is a major issue.
Passengers can rate the driver, and even leave feedback. Upon receiving any sort of negative commenting and on validating the complaint, the driver could be banned. To be fair to the drivers, GrabTaxi allows drivers too to provide a feedback to ban passengers who often fail to honour booking resulting in money and time loss to passengers.
Singapore, according to Tan, has its own unique challenges, “which has aspects of “both regulated and non-regulated”. For instance? Tan answers, “The fares in Singapore are regulated and tipping is discouraged, unlike Philippines, where if the passenger is happy with the services, could tip the driver generously.” And the unregulated part? “In Singapore drivers have the option to not change shifts and continue working in double shifts, which is unlike Philippines, where it is mandatory for drivers to change shifts. Driving for long hours with[out] sleep and rest is just dangerous,” adds Tan, who feels that when GrabTaxi assures safety, it also will try to keep that aspect in mind.
‘I Like it Now’. That’s the third tagline GrabTaxi hopes to use in its communication at some point of time. The positioning comes from the app’s promise of instancy. While the closest driver wins the bid to pick up the passenger to get the service going ‘fast’, the passenger can track the driver approach him/her on the GPS-enabled phone. The app keeps a trip record, for easy reference and allowing up to follow up with the driver in case the passenger has left something behind in the cab.
Building the driver relationship
Coming from a country like Malaysia, where the startup is based, and going to Philippines, it is commendable for the company to have built up a business model, where it says that it has made “55 trips to the moon and back and 333 rounds around the earth”.
More so, the effort is laudable because the startup effort doesn’t start from a country where it had a ready infrastructure – smartphone penetration, internet connectivity, the concept adoptability and above all affordability. How Tan worked with the drivers in rough weathers convincing them, training them is a story for some other day. Keep watching this space.
Considering that it is a smartphone-to-smartphone booking arrangement, and smartphone affordability could become a stumbling block for the business viability, GrabTaxi is partnering with both telcos and mobile manufacturers to subsidise the service and even handsets.
In Philippines, the startup has tied up with local mobile service provider, Globe, where Globe users only pay PHP 50 as against the normal PHP 70 for passenger bookings. Also, drivers on the Globe data service do not pay anything for the data used by the app.
It also has tied up with mobile manufacturer, Cloudfone, to subsidise smartphones for the drivers in Philippines. “We are talking to other telecom players and mobile manufacturers too in other countries. We have to find the cheapest phone for the drivers. Supporting the drivers is very critical for us, because their bottom-line growth impacts our bottom-line growth. Drivers using GrabTaxi in Malaysia, earn anything between 15 to 60 percent from the app bookings,” says Tan.
Grab some buzz
Considering marketing is an important tool of any viable business model, GrabTaxi is leaving no stone unturned. The marketing efforts for the app are largely focused on below the line (BTL) and social media.
“We are at a stage, where we have to keep the demand and supply in balance and creating awareness both amongst passengers and drivers is critical for us,” says Cheryl Goh, Regional Head, Marketing, GrabTaxi.
Considering that GrabTaxi is working in a concentrated market, it makes sense for the startup to not go for a spillover by investing into above the line (ATL). And that’s exactly what Goh believes in too. “For us it’s important that we build up a good word of mouth. We in fact manage social media in-house to monitor every comment and take feedback seriously,” says the Regional Marketing Head.
As a part of the Breast Cancer Awareness Month (October), GrabTaxi has tied up with healthcare centres in Malaysia, to offer subsidized rides to patients going for chemotherapy or other women going for breast-chekups.
The startup hopes to build a socially aware and caring brand imagery. As a part of the effort, it gave free rides to passengers during the recent floods in Manila in Philippines.
On Malaysia Independence day, as a apart of an activation in tie-up with participating outlets, it gave away free Malaysian flag coloured ice-creams to people who showed the app on their mobile phones.
So how’s it building the buzz in Singapore? GrabTaxi is currently focusing only on social media, and BTL will have to wait till it is able to match the demand and supply. “Singapore is a new market and before we really go out marketing, we have to create awareness that we are in Beta and that we are not charging anything right now.”
However, it is running a Beta Testing Campaign, through which participating users would be eligible to win an iPhone 5S. Besides, it will using Facebook, SEO and SEM too. For online buying, GrabTaxi uses the services of Manila based digital agency, Spiralitic.