Key Insights into Singapore's Ride-Sharing Market Landscape

March 19, 2019

We live in interesting times where customers respond well to improved user experiences. The exponential rise of ride-sharing services as a result of the sharp consumer demand has led to more employment opportunities for drivers and innovative commuting options for the masses. Targeted customer loyalty programs and promotional campaigns have further fueled the growth of the ride-sharing market.

Sneak peek at Singapore-based ride-sharing apps

The introduction of ride-sharing apps like Uber and Grab into the country along with on-demand, private-hire cabs was a remarkable disruption in Singapore’s transport landscape. Soon after the Grab-Uber merger, increasing complaints from ride-sharing users regarding steeper prices, delays, and lapses in customer service started surfacing. New players such as Ryde, Kardi, TADA, Urge, and new mega-player GO-JEK are upping their game to give tough competition to the homegrown leader – Grab.

What do they optimize for?

Demand and pricing signals allow ride-sharing operators to efficiently mobilize drivers to areas where they are needed the most. When the demand for rides is higher than the supply of drivers in situations like peak hours, major events, public transport breakdowns or extreme weather conditions, there will be an increase in fares called the ‘price surge.’

Both Grab and ComfortDelGro practice dynamic pricing models and their fares do not include ERP (Electronic Road Pricing). ComfortDelGro starts with a base fare of S$3.20 – comparatively higher than Grab, which charges a base price of S$2.50.

Let’s take a look at how Ryde, Kardi, TADA, Urge, and GO-JEK compete against Grab:

Ryde

  • Base Price: Flat fare calculated based on destination

  • Carpool/Ride-Sharing Options:

    • RydePOOL: Share the same ride with multiple riders

    • RydePET: Pet-friendly option

    • RydeSEND: For shipping smaller items

  • Driver Commission: 10%

TADA

  • Base Price: Starts with a base price of S$2.30

  • Carpooling/Ride-Sharing Options: None

  • Driver Commission: No commission but a transaction fee of 3.4% is charged

  • A blockchain-based app launched by Mass Vehicle Ledger (MVL) Foundation where drivers can earn incentive points and convert them into MVL’s cryptocurrency (MVL coins)

Kardi

  • Base Price: Starts with a base fare of S$3

  • Carpooling/Ride-Sharing Options: None

  • Driver Commission: Low driver commission rate of 12% compared to Grab’s 20% commission3

Urge

  • Base Price: No base price; flat fee

  • Carpooling/Ride-Sharing Options: None

  • Driver Commission: Hired full-time drivers for a monthly salary of S$2,700, coupled with other rewards like annual leave and CPF policies instead of driver commissions

GO-JEK

  • Base Price: Starts with a base price of S$2.70

  • Carpooling/Ride-Sharing Options: None

  • Driver commission: 20%; similar to Grab’s commission charges

  • While there have been debates around dynamic pricing, this mechanism enables drivers to create optimized travel plans towards high-demand areas as well as offer greater accessibility and choice to regular commuters.

Comparison of driver fleets

The number of drivers in the ride-sharing segment is increasing due to rising demand from commuters. Here is a comparison between the total numbers of drivers across all cities in which these companies operate:

key-insights-into-singapore-ride-sharing-market-landscape-1.jpg

The main advantage of having a large fleet of drivers is that the commuters would not need to wait for a long time to board a taxi. Ride-sharing services have paved the way for employment opportunities for drivers. Ride-sharing allows drivers to plan their schedules and decide which part of the country they want to drive in. Be it freelancers, retirees or aspiring artists, people from different lifestyles have adopted ride-sharing as a source of income.

Better strategies & partnerships

The ride-sharing industry has seen important partnerships, e.g., the Grab and Mastercard collaboration to issue prepaid cards. Additionally, UOB and Grab have entered a partnership that will witness UOB delivering financial services to Grab’s huge user base in ASEAN countries. GO-JEK and DBS have also engaged in a collaborative effort to build inclusive digital ecosystems for ride-sharing users. The recent developments in the ride-sharing industry point towards a growing interest in other modes of transport such as the bicycle. The world’s leading bike-sharing company, Mobike, has entered a partnership with Mastercard aiming to build a smart and convenient bike-sharing segment in Singapore. This collaboration is part of Mastercard’s smart cities project that offers quick and secure in-app payments for bike-riders. In addition, this ride-sharing partnership enables local city planners to inspect Singapore’s transportation systems and work towards achieving a smarter economy.

Benjamin Gilbey, Senior Vice President of Digital Payments & Labs – Asia-Pacific, Mastercard, said, As a global leader in today’s payment technologies, we continue to work with partners, such as Mobike, to create smart payment solutions that contribute to better-connected cities. When you have a city like Singapore that is constantly on the move, it’s imperative that the way people pay for transport is also as safe, seamless, and stress-free for both residents and visitors. The essence of Mastercard’s acceptance network is to remove friction from the payment process so that paying becomes as easy as the push of one button. By combining payment, ticketing, and mobile technology, we are bringing about greater time, cost, and operational savings, which ultimately lead to an improved travel experience for commuters.

The road ahead

After Uber’s exit, Grab is continuously expanding the utility of the app by integrating third-party services and investing in strategic partnerships.

Consider, for instance, Grab’s recent partnership with Mastercard to issue virtual and EMV/NFC-enabled physical prepaid cards to its customers via its app. The card lets customers load it with cash that can be spent anywhere around the world – wherever Mastercard is accepted.

Mastercard’s Executive Vice President of Digital & Emerging Partnerships and New Payment Flows in Asia-Pacific, Rama Sridhar, explained the value-addition Mastercard brings: With this partnership, we achieve two objectives. First, to leverage Grab’s existing infrastructure and offer customers the ease of secure digital payment backed by Mastercard, and second, to provide merchants with opportunities for tapping into the company’s growing user base of emerging middle-class consumers, covering one in six mobile phones in Southeast Asia.

Furthermore, as part of the recent partnership between Grab and Booking.com, Grab customers will have the option to book hotels through Booking.com using the Grab app. Similarly, GO-JEK will potentially be rolling out some of its other services like food and parcel delivery in Singapore.

The ride-sharing landscape is witnessing fierce competition with many new players foraying into Singapore’s market and existing players further experimenting and expanding reach/coverage in some cases. Who will win the race, though, is yet to be seen. But one thing is clear – partnerships with various consumer internet companies across verticals will increase the utility of ride-sharing apps.

Read and learn about topics you are interested in.

By clicking, you agree to our Terms, Data Policy and Cookie Policy. You may receive SMS notifications from us and can opt out at any time.

RELATED ARTICLES