In the country where ‘the sharing economy’ has been blooming like Thailand, we have various startups which are in line with the global trend of ‘The Uber of X’. The concept is all about sharing for better utilization. The samples of these kinds of businesses are coworking spaces, Airbnb, bike sharing, or the most familiar business (and the owner of the trend title) like Uber or Grab in South East Asia.
But during the days which the concept of ‘the sharing economy’ hasn’t been generally recognized, some movements take time to be accomplished. Consequently, it can result in some legal unreadiness, cultural unfamiliarity, including the lack of the local business nimble adaptation. In spite of the better public wellness, there has been a number of activities and news spreading around for protesting, campaigning for government’s sanction or even ridiculous luring Uber’s drivers into providing the service by the government’s officers. However, if we look back into the timeline of events, there seems to also be some masters of adaptability in this society.
In retrospect, the first time we heard the news about the conflict of interests between public transportation providers and the vehicle hailing service might not be able to be recalled by anyone anymore - the starting point was the fight of moto-taxi association against Grab with so called ‘GrabBike’ service that allows its app users to call any private motobike for delivery and transportation. The association was asking for legal protection as they claimed that they had always been abided by the public transportation laws and regulation.
Further to that, they also announced to develop their own hailing application to fight back under the collaboration with Department of Land Transport. Nevertheless, the announcement seemed to have gone with the wind in just a few months before the first public appearance of GrabBike (Win), in Thai we call moto-taxi pooling as ‘Win-Mo-To-Cy’, which the app users can call for a moto-taxi through the service. This is an example of a brilliant adaptation of a startup. Although there was a peaceful period within the industry, the new spike of Uber’s protestation wave then came into the scene.
With virality, Uber has been assigned a role as a villain who destroyed the career of the legally hand-to-mouth taxi drivers. The countless requests and complaints from The Thai Taxi Operator Association were filed with regards to the call for a war against Uber!
Grab has to thank the strategy since its inception into the market entering with a strategy which was worth praising (even if we can not be sure if they intentionally planned to, or it was caused by a fluke). Grab attracted the most crucial stakeholder for the raise of its business: taxi drivers. During that time, the company played a good friend’s role by adopting the name ‘Grab Taxi’ to show how friendly it is to the general public. In addition, it proactively acquired the group of drivers by going directly to a large number of gas stations which are one of the popular locations for the taxi community. The firm is also connected to various taxi unions locally, including peer-to-peer inviting systems. Once they had settled into the industry, Grab stepped up its game to provide new services such as Grab Car, Grab Bike, etc., and rebranded itself to be only ‘Grab’.
Grab is an interesting case as lessons have been learned for many startups that may face problems when creating a new value chain or brand new technology which disrupts any existing value chains.
Especially, dealing with local mafias which have been rooted deeply in Thai society which can create an extremely tough situation. True understanding of any culture or society can probably be one of the most valuable competitive advantages and can also be the key to serendipitously expand the size of the business.
Credit : Grab
The latest drama between Grab and the local red trucks in Chiang Mai was also on the front page for awhile. So many pros and cons were discussed by local people and others on social media. But later on, Grab didn’t let us down, it came up with the new service called ‘Grab Red truck’. The collaboration was established out of nowhere to then being totally integrated.
It became a new business opportunity for Grab. Not to mention another new service launched under the name ‘Just Grab’ which is like killing two birds with one stone, it provides traditional taxi drivers a chance to earn more with a lump-sum amount instead of depending on its taximeter. This service partially decreased the ‘claimed-to-be’ unfair competition between taxi drivers and Grab Car, including reducing time to wait for the service on the consumer side as more cars are available to supply those who are willing to pay more. These strategies are quite incomparably smart moves.
Furthermore, the fee that Grab collects from its drivers is also tricky as it seems to be lower than its competitors like Uber, but when you add on the withdrawing fee, the number is almost the same. It just psychologically sounds more inviting and appealing. On top of that, the additional service fee during the peak periods of a day due to (skeptically) high demands is also psychologically tricky.
Despite these success stories, one of the services that was heavily pushed to the market with the name ‘GrabHitch’ as a type of carpooling service, doesn’t seem to be so thriving. Even it’s similar to the rideshare service in other countries ex. UberPool and Lyft, the concept might not fit with Thai culture. It is probably more complicated than it seems.
Nevertheless, from all the mentioned cases, one outstanding lesson is that being adaptable to each unique local culture for Grab, which might be beyond western startups’ understanding, is a huge part that contributes to its success. Even some eastern startups may have to look back and see if we understand the root of our culture enough, including the structure of the society, all stakeholders in the value chain or local ecosystem.
A good business canvas, business plan or financial projection may not be sufficient enough to lead the prosperity in the real business world. Aiming to be the next Unicorn may require some deeper and wider perspectives for all startups in any sector, industry or culture.