Grab and GO-JEK reinventing on-demand mobility to go beyond ridesharing for sustained profitability
Here’s why APAC ride-hailing apps are turning into super apps. Source: shutterstock.com
While the traditional market for mobility, the passenger car market, has slowed and declined, the ride-hailing market has continued to grow. Worldwide, nearly 22 billion ride-hailing trips were completed in 2018 and just under 28 billion trips are expected to be completed by the end of 2019, states global tech market advisory firm, ABI Research. Yet, despite this growth, vendors around the world are experiencing alarming losses.
Growing market share and cutting costs are not enough for sustained profitability and to survive, vendors must evolve on-demand mobility beyond ride-hailing. In the United States, Uber Eats is an example of that evolution, providing Uber with impressive revenue growth rates of 89% in Q1 2019 alone. In the Asia-Pacific region – the largest ride-hailing market in the world, having completed over 70% of global ride-hailing trips – vendors Grab and Go-Jek are expanding into so-called ‘super apps’ which serve as a go-to-marketplace for numerous on-demand services.
While Grab continues to resist attempts to cede its current 11.4% market share of trips completed and maintain its dominance of Indonesia and Vietnam, it’s playing a major role in the ‘super app’ strategy. Considering Indonesia alone accounts for 40% of Southeast Asia’s GDP, Grab’s offering of GrabExpress, GrabFood, GrabFresh, GrabPay, and GrabFinancial, speak volumes to the opportunity of larger revenue streams well beyond its traditional ride-hailing model.
GO-JEK, the fifth ride-hailing APAC vendor with 5% market share of trips completed, also believes in the importance of offering services beyond ride-hailing. In fact, GO-JEK claims that ride-hailing represents less than a quarter of its overall gross merchandise value. Go-JEK’s super apps range from Go-Pay and Go-Mart to GoClean and GoGlam.
As ride-hailing operations continue to operate at a loss and vendors attempt to leverage driver incentives and fare subsidies to gain market share, they should also follow pursue the overall objective of becoming a universal, go-to ‘Amazon-style’ platform for smart mobility services as Grab and GO-JEK have successfully accomplished.
SEE ALSO: Super-app: what is it?
