Grab leads e-hailing race as ride-sharing drivers’ fate remains unclear


As safety concerns mount, with a new regulatory framework for e-hailing services still being formulated, ride-sharing competitors Grab and Uber are rapidly pronouncing their presence in the country.

While the two companies have also been aggressive with their strategies to secure the largest chunk of the booming market, figures showed that Grab has emerged as the forerunner ahead of its rivals.

Market leader Grab — first launched in 2012 — has grown exponentially over five years, now operating in 65 cities across seven countries in South-East Asia, with 1.1 million drivers and over 50 million mobile app downloads to date.

The e-hailing mobile platform averages 2.5 million rides daily, more than double the fares secured six months ago, capturing a 95% market share of third-party taxi-hailing apps regionally.

In Malaysia, from operating in only two cities in the peninsula back in 2013, the company is now present in 25 cities across the country — including Langkawi and Labuan.

Meanwhile, Uber Technologies Inc has remained a strong competitor to Grab in Malaysia, operating in 15 cities in the country compared to Grab’s 25 since entering the market three years back.

Although its presence is smaller than Grab, Uber provides a cost-competitive alternative to users, with passengers often opting for the cheaper ride by utilising both mobile apps.

Grab’s arrival in the country — then known as MyTeksi — was initially met with public outcry from cabbies who saw their livelihood threatened. Grab advertisements can now be seen plastered across busy city centres and other high-traffic areas.

Grab’s expansion strategy has also enlarged its driver base, with reports stating that its Malaysian drivers earn 48% more per hour than the average employee in the country.

However, the reality for drivers either Grab or Uber platforms contradicts these reports, as many complained that their earning capacity had been substantially slashed in the current operating environment.

As the market expands in volume, ride-sharing drivers’ incomes are shrinking, it seems.

It is now a matter of how the industry balances between its continued growth and avoid alienating its driver base.

Adrian Koay, who presently alternates between a part-time and fulltime role as a Grab driver, said he realistically anticipates to earn between RM3,000 and RM3,500 a month working full-time, as reduced fare pickups and new earning structures resulted in a huge income drop.

“The numbers advertised by Grab do not add up in reality. About six months back, a driver could earn RM6,000 a month. Now, it is almost half of that,” Koay told The Malaysian Reserve.

One of the main reasons cited for the income drop is the commission charged by both Grab and Uber for its drivers at up to 20% and 25% respectively.

According to a recent report, a survey of 300 Grab and Uber drivers found that 60% of respondents want the authorities to regulate the amount of commission e-hailing companies are allowed to take from drivers, as current rates are deemed too high and unfair.

Prospective changes to the Commercial Vehicles Licensing Board Act 1987 and Land Public Transport Act 2010 — which will allow both ride-sharing drivers and traditional cabbies to co-exist — could also see Grab and Uber drivers bearing more costs and consequently abandoning the platforms.

“Drivers will have to weigh the additional costs against the benefits of being a ride-sharing driver.

“If the new regulatory requirements and procedures undercut their profits, then it makes no sense to continue as a Grab or Uber driver,” Koay said.

The situation would result in a significant number of drivers exploring other forms of employment and leaving the e-hailing game for a more lucrative alternative.

However, Koay said it is difficult to earn a stable income from Uber, due to the company presently being on a fare-based system and abolishing its incentive schemes.

“I tested Uber for about three to four months and found that securing fares was on a luck basis and my income was not guaranteed.

“Often in the course of an hour, I made only RM8 in gross fares — the return does not justify the amount of time spent and petrol consumed.”

While the two ride-sharing giants slug it out for market dominance, new player PICKnGO — a Malaysian taxi-based e-hailing app — is also aiming at having a slice of the e-hailing pie.

Pick N Go Sdn Bhd is leveraging on registered cabbies and metered rates, instead of surge pricing which is used by both Grab and Uber.

Metered rates are often cheaper than surge pricing — sometimes even half the rates — and could provide users an affordable alternative to that of Grab and Uber.

However, questions remain on whether PICKnGO can compete with the deep pockets of the mainstay e-hailing providers in the country.

To date, Grab secured a total of US$1.43 billion (RM6.13 billion) in investments since late 2013.

The aforementioned factors will very likely have a significant impact on the shape and form of the e-hailing game in the coming months, as the industry braces for new regulation and copes with new players in the market.

If history is any indicator, the presence of Grab and Uber will remain strong in the country, as both have and continue to operate in countries where there are laws dictating ride-sharing services.