Transport matching apps have faced several regulatory hurdles around operating a transport matching company in the highly fragmented Asian markets. The second day at Echelon Asia Summit hosted a panel discussion on what’s next for transport matching apps in Asia, moderated by e27’s Michael de Waal-Montgomery.
There are many transport apps such as GrabTaxi, Easy Taxi, Uber and others competing with each other in the region.
On competition, Chan Park, GM, Southeast Asia, Uber said, “I think that competition is good. Our goal is to bring a lot of value to the riders and drivers. We aim to provide riders with cheap, reliable and safe rides while drivers should make more money as a result of these platforms being more efficient.”
“If competitors can bring the same kind of value (that we do) then it will be better for both the consumers and drivers,” he added.
Regulatory challenges in Asia
The root of the problem lies in the fact that these new apps and technologies are simply growing too fast for most countries to keep up with, on the regulatory front. However, there are many regulatory challenges, fuelled by a strong taxi lobby that generates revenue for the government.
Cheryl Goh, Group Vice President of Marketing, GrabTaxi said, “We are doing a far better job at transportation than the traditional market. We are better than the competition and the government and we work harder than anybody else to ensure (the) safety of (our) passengers.”
“However, if we are operating in this space then it is extremely important for us to be always open for a constructive dialogue,” she added. In an attempt to stand out from competitors in the taxi app space and lure more drivers to its platform, GrabTaxi Singapore announced a new S$3.5 million (US$2.8 million) welfare fund for qualifying drivers that will offer medical, accident coverage and crisis support.
The Philippines has made technology-based ride-sharing services legal, providing a regulatory framework for them to operate in the country. Goh welcomed the move and considers it a big step forward for public transportation.
Park felt that it is an indicator that conversations are changing, with everybody realising the value of the services offered by transportation apps. “Productive dialogues with various players can make it work,” he said.
Lam stated that China is a very different and interesting market. However, he admitted that there is a lot of competition with many copy-cats of the same business model, which can be challenging at times.
Next big thing in the sharing economy
Goh shared that GrabTaxi is utilising the network to have more transportation options.
Uber is testing out its food delivery service in Indonesia during the holy month of Ramadan in an effort to gain users. Park believed that it is crucial to localise solutions as per the market.
He opined that ride-sharing is certainly the next big thing. According to him, the government has been evangelising car-pooling for decades to reduce wastage. But with the advent of technology, it has become convenient to connect with people who share similar destinations.
Uber is also trying this experiment with ride-sharing in San Francisco and other cities and Park shared that the company is planning to introduce ride-sharing in Asia also, where people can split the fare with someone travelling to the same location.
Valuations of ride-sharing apps
Experts concluded that with the rise in the number of smartphones and increasing penetration of Internet, ride-sharing apps have the future to dominate the usage of mobile apps. Growth rates are unprecedented, hence billion-dollar valuations are completely justified.