The future of Ride Hailing? » Manila Bulletin Technology

Manila Bulletin Philippines

Breaking News from the Nation's leading newspaper


Online Newspaper

Showbiz and Celebrity News

Sports News

World News
News Asia

The future of Ride Hailing?


By Wilson Chua

Some ideas that occurred to me straight after listening to InnovFest Unbound sessions. These sessions included Go-Jek, Grab, TenCent and Waymo.  Then the news that TenCent and Warburg Pincus offered a USD 1 Billion to Go-Jek. This will fund Go-Jek’s expansion into Southeast Asia.

Ride Hailing companies would partner with AV systems like Waymo.

Autonomous vehicle (AV) gives several immediate advantages. (Note: Grab is already partnered with SG based Nutonomy)

Firstly, you don’t need to recruit human drivers. You do need to partner with fleet operators instead. This shortens their time to “go to market”.

Secondly, Fleet Operators will welcome the development. They could avoid most of their current issues. No drivers mean no more compliance with local labor laws. No drivers in the payroll also eliminates payroll taxes and the army of staff needed to process them. No more drivers mean no more complaints of rude or inappropriate driver behavior.

Looking out further, could Go-Jek enter the Philippines by faster by talking to Rene So? Rene is the president of the Toyota Dealers Association. Already Toyota Japan is investing around USD 70 million into Japan Taxi.

Thirdly, ride hailing companies have larger passenger capacity.  Without the driver, there is one more additional seat. Now, groups of 5 passengers need not take two taxis anymore.

Fourth, no drivers mean lesser accidents. Waymo estimates a reduction of around 94%.  Robert Goldman predicts the collapse of the Insurance market because of the fewer accidents. Who would need insurance in a world that has 94% less accidents?

Finally, AV equipped vehicles are climate friendlier. A McKinsey study notes that AV systems saves 300 million tons of carbon emissions yearly.

Ride Hailing companies focus on extra services.

We have seen Uber and Grab branch out into food deliveries. This is the beginning. It is all about expanding their collection of consumer behavior data. With more consumer services, the ride hailing companies accumulate more data points. They use data analytics to do modelling and predictions. This fuel a virtuous cycle of more data fueling more services. More services beget more data. Any competition without such virtuous cycle models will not be competitive enough to survive.

So, I expect to see them offer more packaged deals with 3rd parties.

Ride Hailing as future banking points of presence

We have seen companies such as AirAsia, Alibaba and Grab go into the mobile payment spaces. This is about disintermediating the banking system. This cuts down on fees, gives the companies more data points and helps their consumers save money. It encourages a ‘sticky-ness’ in their ecosystem.

It would not be a far stretch to see that one day, Banks would wake up and find a coopetitor in Ride hailing services. Already, DBS reported huge success when DBS partnered with Café Coffee Day, a popular chain in India. Now Café Coffee Chain drinkers can open a Digibank account when they pay for their coffee.  Might ride hailing service give the term ‘banking on the go’ a new meaning?

Related Posts