AirAsia pushes into ride-hailing race in Thailand, rivaling Grab

AirAsia has launched a ride-hailing service in Bangkok, eyeing a slice of the region’s growing market as tourism reopens.

AirAsia Ride officially started operations from Tuesday, with 3,000 drivers currently registered in the capital and plans to recruit more, the company said in a statement. The firm also aims to expand into holiday destinations in Thailand such as Phuket and Chiang Mai to capture demand from international tourists, it said.

AirAsia, the budget airline that experimented with online commerce during the depths of the pandemic, is counting on a rebound in travel this summer to fuel a so-called “super app” that offers a suite of on-demand services from car-hailing to flight bookings. Competitors in the country include Grab Holdings Ltd. and Estonia’s Bolt Technology OU.

“It won’t be an easy task for AirAsia to penetrate the ride-hailing market as it will need to burn a lot of cash to recruit drivers,” said Bloomberg Intelligence analyst Nathan Naidu. “Having said that, my experience with other markets in the region tells me that Southeast Asians are not yet loyal to their platforms, meaning they can be persuaded to switch with incentives such as coupons and promotions.”

Tourism-reliant Thailand will allow bars, pubs and karaoke clubs to reopen in some regions from Wednesday, ending a more than a year-long shutdown.

The value of online ride-hailing and food delivery market in Southeast Asia is expected to more than triple to $42 billion by 2025 from $13 billion last year, according to Statista. — by Bloomberg