SMU-16-0012

GRAB: DISCOVERING NEW FRONTIERS FOR GROWTH IN

THE SOUTHEAST ASIAN SHARING ECONOMY
It was May 2016 and Anthony Tan, the CEO of Grab (formerly GrabTaxi), an on-demand
transportation-app company headquartered in Singapore, was locked in a high stakes struggle to
win the hearts and minds of drivers, passengers and regulators alike in Southeast Asia. The
company’s raison d'être was to create positive social impact through a sustainable business model
that solved transportation problems across the region. In essence, doing good well.

Launched in 2012, Grab began in Malaysia as a third-party e-hailing taxi dispatching mobile
application (hence, the original name GrabTaxi). The company had been expanding at a
remarkable speed. By 2015, the app had been downloaded more than 4.4 million times, averaging
seven bookings per second. 1 A year later the app had over 13 million downloads, serving 30
cities across six countries.2 The app’s functionality too had expanded to include an array of
locally suited transportation booking options beyond just taxi services, such as car-pooling, ride-
sharing, private vehicle hire and more.

Valued at about US$1.5 billion, Grab was one of Asia’s most successful start-ups. 3 The
company’s business model was aligned with its social mission to improve the safety and
accessibility of transportation, along with improving the lives of its passengers and drivers. 4
End-users benefited through improved transportation options, where safety, certainty and speed
were guiding principles of the company.

However, long-term success was far from guaranteed. Technological and social change was
always afoot. The sharing economy, of which Grab was a part, was hyper-local, social and mobile
– and above all – extremely competitive. Uber, its main rival, was already present in 60 countries
– and according to a 2015 TechInAsia publication, held a technological edge over Grab while
also being backed by high profile investors like Google and Baidu.5 Nonetheless, Grab too was
well funded and eager to close any technological gaps, or potential gaps, by attracting world-
class engineering talent. In January 2016, Grab announced that it would be opening a fully
functional engineering office in Seattle – a global tech mecca in its own right – to strengthen its
technological capabilities. 6 Moreover, the company’s local roots could prove to be a competitive
advantage in navigating Southeast Asia’s many complicated and highly fragmented markets,
which posed significant regulatory uncertainty in the on-demand transportation industry.

1
Grab, “GrabCar invests 4 million USD to ensure safer rides for its car-booking service,” 25 May 2015, About GrabTaxi section,
https://www.grab.com/ph/grabcar-invests-4-million-usd-to-ensure-safer-rides-for-its-car-booking-service/, accessed April 2016.
2
Elaine Huang, Is Grab still a start -up? Group VP marketing Cheryl Goh shares more, “ Deal Street Asia”, 12 April 2016,
http://www.dealstreetasia.com/stories/is-grab-still-a-startup-group-vp-marketing-cheryl-goh-shares-more-36760/, accessed April
2016.
3
Yoolim Lee and Chua Kong Ho, Four-Year-Old Uber Rival GrabT axi Expects to Break Even in 2016, “ Bloomberg Technology”,
28 January 2016, http://www.bloomberg.com/news/articles/2016-01-28/four-year-old-uber-rival-grabtaxi-expects-to-break-even-in-
2016, accessed April 2016.
4
Grab, About Grab, company website, https://www.grab.com/sg/about/, accessed April 2016.
5
Nadine Freischlad, “Uber vs. GrabCar: who’s speeding ahead in Southeast Asia?” Tech In Asia, 17 October 2015, Accessed
April 2016.
6
T he T imes of India, Uber rival GrabT axi to open tech centre in Seattle, “Reuters”, 14 January 2016,
http://timesofindia.indiatimes.com/tech/tech-news/Uber-rival-GrabTaxi-to-open-tech-centre-in-Seattle/articleshow/50577812.cms,
accessed April 2016.

This case was written by Professor Mei Lin and Christopher Dula at the Singapore Management University. The case
was prepared to provide material for class discussion and use in student case competitions. The authors do not intend
to illustrate either effective or ineffective handling of a managerial situation.

Copyright © 2016, Singapore Management University Version: 2016-04-27

SM U-16-0012 Grab: Discovering New Frontiers for Growth in the Southeast Asian Sharing Economy

At the same time, inclusive business models driven by mobile technology and network
penetration represented new frontiers and opportunities at the bottom-of-the-pyramid. There was
a large potential market for offering affordable services that could improve the lives of
aspirational consumers in the emerging markets, including those of Southeast Asia.

To seize this opportunity, Grab had to develop and leverage its technology to establish a
competitive advantage, while also mitigating risk – an approach that would require innovative
ideas and novel initiatives. Success would lie in providing a feasible solution that was
measurable, scalable and synergetic within existing and new partnerships, business functions and
competencies. In this environment, customer-stickiness mattered. To succeed, Grab would have
to be perceived as an indispensable part of the broader ecosystem in which it operated.

The sharing economy

The sharing economy, sometimes referred to as ‘collaborative consumption’, was defined as “the
peer-to-peer-based activity of obtaining, giving, or sharing access to goods and services,
coordinated through community-based online services” 7 , typically through a smartphone mobile
application. In this manner, individuals could gift, barter or rent excess or unused capacity of
their goods and services to other individuals or groups (refer to Exhibit 1 for a profile of the
sharing economy). Basically, all firms operating in the sharing economy worked by efficiently
matching individual providers of goods and services with consumers who would otherwise be
strangers.

Although the term ‘sharing-economy’ had been around since the early 2000s – it was not until
the aftermath of the Great Recession in 2007-08 that the term gained widespread popularity. In
2011, Time Magazine declared it one of ten ideas that would change the world. 8 This was not an
overstatement. In 2013, PwC estimated the sharing economy to be worth around US$15 billion,
and projected that it would increase to US$335 billion by 2025. It encompassed five key sectors:
peer-to-peer lending and crowdfunding, online staffing, peer-to-peer accommodation, car
sharing, and music and video streaming (refer to Exhibit 2 for growth projections of the sharing
economy, and by sector).9 However, this was not to suggest that only five sectors constituted the
sharing economy; its true scope and potential were undefined.

Companies like Airbnb and Uber – amongst the most globally recognised operators in this space
– connected people and organisations willing to rent their assets or provide temporary services
to consumers, such as lodging and transportation. Revenues for these kinds of companies were
typically generated through a percentage fee of sorts. It was important to note that the actual
provider of the good or service being consumed was not an employee of the company. For this
reason, Airbnb was not a hotel operator and Uber was not a taxi company. They were instead
facilitators of collaborative consumption, alternative services operating in traditional industries.

7
Juho Humari, Mimmi Sjoklint and Antti Ukkonen, The Sharing Economy: Why People Participate in Collaborative
Consumption, “ Journal of the Association for Information Science and Technology”, July 2015,
https://www.researchgate.net/publication/255698095_The_Sharing_Economy_Why_People_Participate_in_Collaborative_Consum
ption, accessed March 2016.
8
Bryan Walsh, 10 ideas that will change the world, “ Time Magazine”, 17 March 2011,
http://content.time.com/time/specials/packages/article/0,28804,2059521_2059717_2059710,00.html, accessed March 2016.
9
PwC, “T he Sharing Economy – Sizing the Revenue Opportunity”,
http://www.pwc.co.uk/issues/megatrends/collisions/sharingeconomy/the-sharing-economy-sizing-the-revenue-opportunity.html,
accessed March 2016.

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SM U-16-0012 Grab: Discovering New Frontiers for Growth in the Southeast Asian Sharing Economy

These were just a couple of well-known examples. The reality was that this model could include
emerging and hitherto unknown constructs of value (refer to Exhibit 3 for new concepts of value
in the sharing economy). However, because ‘sharing’ was facilitated through a company
intermediary that automatically conducted the matching (rather than an open market like eBay or
craigslist where buyers hunted down and bid on services and wares), the term ‘access economy’
was perhaps more appropriate.10

One thing was certain: the sharing economy was more than a trend; it was a new way of doing
business that could transform the economy and the nature of employment. According to Tx Zhou,
a managing partner at Karlin Ventures, an early stage venture capital fund,

Employment will become increasingly uncoupled as more opportunities for flexible part -time
work become available… In the immediate future, we’ll see increased marketplace efficiency
and consolidation. Just as multichannel networks were built on top of YouTube, new tools
and services will spring up to support the sharing economy… The sharing economy’s next
layer will be a hub-and-spoke model of services. This model will only be possible once these
marketplaces have APIs [application program interface 11 ] to integrate with each other.12

Disruption is a function

Establishing trust – or at least the perception of trust – was essential for the sharing economy
model to work. Indeed, this went back to the very nature of the firm and its existence. Firms
existed in order to reduce transaction costs in a trust-less environment, essentially as an
intermediary. Companies in the sharing economy also coordinated economic transactions, albeit
differently.

In the sharing economy, companies aimed to solve the supply and demand problem by building
a platform that efficiently matched under-utilised, yet distributed, capacity to demand. Successful
platforms also included mechanisms to ensure payment and delivery of services along with
verification of identity and reputation ranking in order to better establish trust between unknown
parties. All of this was accomplished by harnessing the underlying technologies behind the
Internet, information processing, smartphones and high-speed mobile connectivity, as well as
data analysis and social media.

These companies thus made it possible for anyone with a smartphone to become an ad-hoc taxi
driver, bed-and-breakfast owner, or equipment rental agency whenever they had spare time,
unproductive resources and inclination.13 The efficiency of such a digital platform also made
operating costs for both ‘sharers’ and facilitators incredibly low and highly scalable. This had the
potential to be catastrophically disruptive to incumbent, more traditional business models that
had to manage real estate, inventory and other assets.

However, consumer switching costs and brand loyalty tended to be lower for companies peddling
on-demand access. All it took for a consumer or producer to change platforms/providers was an
instantaneous app download from one’s phone. Convenience and reliability were some of the

10
Giana M. Eckhardt and Fleura Bardhi, The Sharing Economy isn’t about sharing at all, “ Harvard Business Review”, 28 January
2015, https://hbr.org/2015/01/the-sharing-economy-isnt-about-sharing-at-all, accessed March 2016.
11
API (application program interface) was a set of routines, protocols, and tools for building software applications that specified
how software components should interact, and was used when programming graphical user interface (GUI) components,
http://www.webopedia.com/TERM/A/API.html, accessed March 2016.
12
T X Zhuo, “ Airbnb and Uber Are Just the Beginning. What's Next for the Sharing Economy”,
http://www.entrepreneur.com/article/244192, accessed March 2016.
13
T he Rise of the Sharing Economy, “The Economist”, 9 March 2013, http://www.economist.com/news/leaders/21573104-
internet-everything-hire-rise-sharing-economy, accessed March 2016.

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SM U-16-0012 Grab: Discovering New Frontiers for Growth in the Southeast Asian Sharing Economy

main drivers of demand. Moreover, margins were razor thin – hence the hyper-competitive nature
of the ‘access’ economy. Network effects and volume were thus critical to success.

These characteristics presented both concerns and opportunities for players in this space; for
instance, transportation network companies, like Uber and Grab, competed against each other as
well as against other ride-sharing apps out there. Many taxi companies too offered their own
booking applications. Both passengers and drivers could easily use multiple apps at once and
switch between them at their choosing – it was a free market after all.

The genesis of Grab

Tan, along with co-founder Tan Hooi Ling (no relation), established MyTeksi in Kuala Lumpur,
the capital city of Malaysia, in 2011 (outside of Malaysia the service would be branded as
GrabTaxi). The two had met at Harvard Business School (HBS), when they were studying for
their Masters of Business Administration (MBA) degree. The idea of what ultimately became
Grab had earned them the runners-up position at HBS’ 2011 Business Plan Contest, as well as
finalists in HBS’ Minimum Viable Product Funding award. 14

At that time in Malaysia’s taxi industry, there were serious issues surrounding safety, non-
compliance with rates, intimidation tactics and poor service. In a 2015 TechInAsia talk, Tan said,

We started GrabTaxi because the taxi system in Malaysia was a mess. Drivers weren’t
making enough money and hated their jobs. Women couldn’t go around safely. We needed
to do something about it.15

Hooi Ling Tan added,

We had no intention of launching our own business when we were in school. Both of us had
commitments: Him [Tan] to his family business, myself to McKinsey [which had sponsored
her studies at HBS]… Because we realised the power of the idea and the ability to potentially
make it happen, we decided to re-craft our lives post-school around it.16

Grab’s beginnings were quite modest. Tan’s early days were spent going door-to-door asking the
biggest taxi fleet companies to try his product. Commenting on these sales calls, Tan said,

The first one would say no, and tell me to go back to the family business, as it is much easier.
‘Don’t sell this stupid app. Nobody will use it. Taxi drivers will steal your phone – they’re
terrible people.’17

It was the fifth taxi company that Tan approached – which operated a small fleet of 30 taxis –
that first gave him an opportunity to try out the app. 18

14
Colin T ung, “Call me a plumber, not COO: GrabT axi Co-founder Hooi Ling Tan”, 7 December 2015, https://e27.co/call-
plumber-not-coo-grabtaxi-co-founder-hooi-ling-tan-20151207/, accessed April 2016.
15
Nadine Freischlad, T hree years, $340M funding, millions of users: GrabT axi’s Anthony T an reflects on the journey, “Tech In
Asia”, 8 May 2015, https://www.techinasia.com/3-years-4-funding-rounds-grabtaxis-anthony-tan-reflects-journey, accessed March
2016.
16
Colin T ung, “Call me a plumber, not COO: GrabT axi Co-founder Hooi Ling Tan”, 7 December 2015, https://e27.co/call-
plumber-not-coo-grabtaxi-co-founder-hooi-ling-tan-20151207/, accessed April 2016.
17
T erence Lee, GrabT axi is one of Southeast Asia’s hottest startups. Here’s how it’s kicking ass, “Tech In Asia”, 21 October 2014,
https://www.techinasia.com/grabtaxi-southeast-asias-hottest-startups-kicking-ass, accessed April 2016.
18
Ibid.

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SM U-16-0012 Grab: Discovering New Frontiers for Growth in the Southeast Asian Sharing Economy

On June 5, 2012, the company launched its on-demand taxi hailing smartphone application in
Kuala Lumpur. In August 2013, Grab expanded into Manila. 19

In May 2014, Grab launched ‘GrabCar’ in Malaysia and Singapore, which was a real-time ‘ride-
sharing’ service for private vehicle owners and passengers. 20 Tan explained,

What has ensured MyTeksi’s success regionally has been the ability to adapt and evolve to
meet our [users’] needs - that’s why we are introducing GrabCar. We see an opportunity to
fill a gap in the industry without taking away business from our core user base of taxis.
GrabCar will give our passengers that upmarket, personalised experience, while at the same
time, ensuring safe and reliable rides… GrabCar is essentially a complementary service
provided by MyTeksi. We found that there are times throughout the day when it is almost
impossible for our customers to get taxis. Unfortunately, in this region, there is a ceiling on
the number of taxi permits issued. GrabCar provides more cars on the road when people
really need them, especially during peak hours. The inclusion of GrabCar as part of the
MyTeksi service offers our customers access to a wider network of taxis, as well as limousine
fleets.21

Similar to GrabCar, ‘GrabBike’ was launched in November 2014 in cities such as Ho Chi Minh
and Jakarta, where motorbikes and scooters were the predominant form of transportation. In these
locations, drivers wore Grab’s signature green branded helmets, while also having one on hand
for passengers.22

In a little less than four years, GrabTaxi scaled up and expanded into 30 cities across six countries
in Southeast Asia. 23 This was a challenging, yet potentially lucrative, region to do business in.
By 2015, more than 630 million people resided in Southeast Asia, which was loosely integrated
into a regional trade bloc: the Association of Southeast Asian Nations (ASEAN). 24 Collectively,
ASEAN was the seventh largest economy in the world at US$2.5 trillion, growing at an average
of 5% per annum. 25 In addition, the region had an aspiring middle-class, rising levels of
affluence, increased urbanisation, and a healthy and fast growing mobile apps sector (refer to
Exhibit 4 for regional megatrends and key indicators).

But achieving scale in ASEAN was more challenging than in many other markets around the
world. The region was highly fragmented, home to disparate styles of government and economic
systems as well as incredibly diverse populations, both geographically and demographically. The
app had to reflect this. Cheryl Goh, group vice president for marketing, explained some of the
challenges the Singapore-based company faced while expanding its network across the region,

Our challenges are related to the diversity of the Southeast Asian market. These include
language issues, lack of infrastructure and cultural differences… In Indonesia alone, there
are hundreds of languages and dialects. The way the company recruits drivers and attracts

19
Nadine Freischlad, T hree years, $340M funding, millions of users: GrabT axi’s Anthony T an reflects on the journey, “Tech In
Asia”, 8 May 2015, https://www.techinasia.com/3-years-4-funding-rounds-grabtaxis-anthony-tan-reflects-journey, accessed March
2016.
20
Jon Russell, Uber rival GrabT axi launches a limo service for Southeast Asia, starting in Malaysia, “TNW”,
http://thenextweb.com/asia/2014/05/16/uber-rival-grabtaxi-launches-limo-service-southeast-asia-initially-malaysia/#gref, accessed
April 2016.
21
Jacky, “GrabT axi launches new limo service GrabCar, wants to be the Uber of Asia”, 19 May 2014,
https://sg.news.yahoo.com/grabtaxi-launches-limo-grabcar-wants-023053523.html, accessed April 2016.
22
Daniel T ay, GrabTaxi’s motorcycle service rides into its third city, offers free rides in Jakarta, “Tech In Asia”, 20 May 2015,
https://www.techinasia.com/grabtaxi-grabbike-motorcycle-service-jakarta, accessed April 2016.
23
Grab, “About Grab”, https://www.grab.com/sg/about/, accessed April 2016.
24
CIMB. ASEAN Insight, ASEAN’s Bright Future, “The Economist”, http://aseaninsight.economist.com/2015/07/20/aseans-
bright-future/, accessed March 2016.
25
Ibid.

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SM U-16-0012 Grab: Discovering New Frontiers for Growth in the Southeast Asian Sharing Economy

passengers also differs in each of the company’s six markets because of the unique cultures,
which has made region-wide marketing campaigns a rarity. The solution has been to use
local marketing teams to build deep connections with communiti es.26

By the end of 2015, Grab had raised US$680 million in disclosed funding from ten investors; 27
and its estimated value was thought to be US$1.5 billion.28 In early 2016, the tech unicorn was
rebranded as ‘Grab’, hosting any even wider array of service offerings. By then, the app had been
downloaded more than 13 million times, and there were over 250,000 drivers in the Grab
network.29

A social enterprise

Improving the safety and accessibility of transportation, along with improving the lives of its
passengers and drivers, was core to Grab’s mission. 30 The company aimed to make travelling
easier and safer for passengers and sought to increase the incomes of taxi drivers.31 For example,
the Grab app helped connect taxi drivers with passengers more easily, quickly and efficiently
than if drivers simply searched for fares or responded to company dispatches - thus increasing
earnings. According to Tan, empirical evidence at Grab suggested that taxi drivers who actively
used the Grab app could see their incomes increase anywhere between 30% and 300%.32

Grab was engaged in numerous initiatives designed to create a positive social impact. In 2015,
the company launched GrabSchool, a programme that aimed to develop life skills and foster a
spirit of entrepreneurship among the children of Grab’s drivers. 33 By September 2015, this
initiative had been rolled-out in Malaysia, the Philippines and Singapore, and was expected to be
launched in Indonesia, Thailand and Vietnam by end-2015.34

In March 2016, Grab announced that it would provide a first-of-its-kind free personal accident
insurance that would cover all GrabCar and GrabBike passengers in the region, from the first
dollar.35 It also implemented several local initiatives across the region, and reported,

In Malaysia, Grab is installing CCTV cameras in the cars of 100 women drivers to ensure
on-the-job safety, especially in the event of disputes. In the Philippines, Indonesia and
Thailand, Grab operates mandatory safety riding courses for all GrabBike rider s.

26
Siddharth Philip, GrabTaxi Says It Faces Challenges Expanding in Asia, “Bloomberg”, 19 August 2016,
http://www.bloomberg.com/news/articles/2015-08-19/grabtaxi-raises-over-350-million-from-china-investment-didi, accessed April
2016.
27
CrunchBase, Grab (formerly GrabTaxi) overview, https://www.crunchbase.com/organization/grabtaxi#/entity accessed March
2016.
28
Newley Purnell and Rick Carew, Singapore’s GrabTaxi Rides High With Over $200 Million Investment, “The Wall Street
Journal”, 1 July 2015, http://www.wsj.com/articles/singapores-grabtaxi-raises-over-200-million-1435729147, accessed March
2016.
29
Elaine Huang, Is Grab still a start -up? Group VP marketing Cheryl Goh shares more, “ Deal Street Asia”, 12 April 2016,
http://www.dealstreetasia.com/stories/is-grab-still-a-startup-group-vp-marketing-cheryl-goh-shares-more-36760/, accessed April
2016.
30
Judith Balea, Grab gifts governments data to make traffic jams less awful, “ Tech In Asia”, April 5, 2016,
https://www.techinasia.com/grab-big-data-traffic, accessed April 2016.
31
Kaylene Hong, GrabTaxi is growing a taxi-booking service in Southeast Asia using a unique model, “ Thenextweb”, 2016,
http://thenextweb.com/asia/2014/04/08/grabtaxi-is-growing-a-taxi-booking-service-in-southeast-asia-using-a-unique-model/#gref,
accessed April 2016.
32
Ibid.
33
Grab, “ GrabT axi launches GrabSchool to teach drivers’ children entrepreneurship and life skills”, December 1, 2015,
https://www.grab.com/th/en/2015/12/01/english-grabtaxi-launches-grabschool-to-teach-drivers-children-entrepreneurship-and-life-
skills/, accessed April 2016.
34
Ibid.
35
Grab, “ Grab Provides Free Personal Accident Insurance for Passengers and Drivers”, March 15, 2016,
https://www.grab.com/th/en/2016/03/15/english-grab-provides-free-personal-accident-insurance-for-passengers-and-drivers/,
accessed April 2016.

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SM U-16-0012 Grab: Discovering New Frontiers for Growth in the Southeast Asian Sharing Economy

Furthermore, all GrabBike riders are 100 percent licensed and equipped with helmets and
protective jackets. Such local initiatives complement Grab’s existing regional initiatives such
as ensuring stringent criminal and background screenings and safety t raining for drivers,
vehicle inspections and in-app safety features such as ‘Share My Ride’.36

At a higher level, Grab also collaborated and worked closely with governments on macro-issues
within their various jurisdictions to improve transportation related issues, such as congestion,
which many Southeast Asian cities were notorious for. 37

In early 2015, Grab announced a data sharing partnership with The World Bank’s ‘Open-Traffic’
project to provide real-time data streaming that reported service volume, location tracking and
historic journey times. This had promising potential to help governments, who could plug into
the platform in order to better model traffic, examine historical data, understand congestion
patterns and plan infrastructure accordingly, as well as improve emergency response and disaster
preparedness.38 In a public statement, Tan said,

…this partnership will drive GrabTaxi closer towards our social mission to significantly
improve the lives of our drivers and passengers – and ultimately change the way 620 million
people move in Southeast Asia. Together with the World Bank and local governments, we
look forward to improving road safety and traffic congestion in the cities we operate. 39

On April 5, 2015, The Grab-World Bank-Department of Transportation and Communications

OpenTraffic Philippines pilot was launched in Manila. 40

Strategic partnerships

The Japanese telecom company, SoftBank, was Grab’s largest investor with US$250 million in
venture funding. SoftBank also had stakes in other transport network companies, such as Lyft in
the United States, Didi Kuadi in China and Ola in India – all of which (including Grab) counted
Uber as their key competitor in their respective markets. 41 Together these companies formed a
strategic partnership to rival Uber’s global footprint, while remaining independent companies
focused on their own regions. 42 For example, while each company would handle mapping,
routing and payments through a secure API in their own markets, customers would be able to
access the entire partnership network using their local app, providing a seamless, more global
experience beginning in the first quarter of 2016.43 Bhavish Aggarwal, the co-founder and CEO
of Ola, commented,

36
Ibid.
37
Judith Balea, Grab gifts governments data to make traffic jams less awful, “ Tech In Asia”, April 5, 2016,
https://www.techinasia.com/grab-big-data-traffic, accessed April 2016.
38
T he World Bank, How an Open Traffic Platform is Helping Asian Cities Mitigate Congestion, Pollution, October 19, 2015,
http://www.worldbank.org/en/news/feature/2015/10/19/how-an-open-traffic-platform-is-helping-asian-cities-mitigate-congestion-
pollution, accessed April 2016.
39
Miguel R. Camus, GrabT axi ties up with World Bank, “ Philippine Daily Inquirer”, 8 April 2015,
http://business.inquirer.net/189832/grabtaxi-ties-up-with-world-bank, accessed March 2016.
40
Chris Schnabel, Grab, World Bank launch big data project to ease PH traffic, “Rappler”, April 5, 2016,
http://www.rappler.com/business/industries/208-infrastructure/128327-open-traffic-initiative-grab-worldbank, accessed April 2016.
41
Jon Russel, SoftBank Invests $250M In GrabTaxi, Uber’s Archrival In Southeast Asia,
“ T echCrunch”, 3 December 2014, http://techcrunch.com/2014/12/03/softbank-invests-250m-in-grabtaxi-ubers-archrival-in-
southeast-asia/, accessed March 2016.
42
Ingrid Lunden, Lyft, Didi, Ola and GrabT axi Partner in Global Tech, Service Alliance to Rival Uber, “TechCrunch”, 3
December 2015, http://techcrunch.com/2015/12/03/lyft-didi-ola-and-grabtaxi-partner-in-global-tech-service-alliance-to-rival-uber/,
accessed April 2016.
43
Ibid.

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SM U-16-0012 Grab: Discovering New Frontiers for Growth in the Southeast Asian Sharing Economy

We are excited to partner with Lyft, Didi Kuaidi and GrabTaxi, allowing seamless mobility
access across hundreds of cities globally for our combined user base that runs into hundreds
of millions… This will also allow all four companies to learn from each other’s local
innovations and successes that can help us in our shared mission to build better mobility
solutions in our respective markets.44

Grab was also open to partnerships for app development on its platform. On December 9, 2015,
Grab signed an MOU with the Singapore-based telecom conglomerate, SingTel Group, to use
SingTel’s mobile wallet services to pay for rides on the Grab app. 45 This option would be made
available by mid-2016 through an open-platform integration with major regional telecoms
associated with SingTel through joint ventures, such as AIS (Thailand), Globe Telecom (the
Philippines) and Telkomsel (Indonesia). This partnership would thus expand Grab’s payment
options beyond cash and credit into digital currency, which was becoming more and more popular
as a means of payment for the un-banked and under-banked across the world. Tan said,

People in Southeast Asia are hyper-connected on mobile, and it’s our goal to provide another
payment option for passengers via a channel they are familiar with. GrabTaxi passengers
will soon have the option to streamline their payments, including transport expenses, to one
mobile wallet, and reduce reliance on carrying cash.46

This agreement had strong synergetic potential. For example, Singtel had a combined customer
base of 500 million people through its own operations and that of its associate companies. 47
Moreover, it was a majority owned company of Temasek Holdings, a Singapore government-
owned investment firm, which also had investments in Grab through its other wholly owned
subsidiary, Vertex Venture Holdings.

Head-to-head with Uber

Although Uber and Grab were not the only mobile booking apps for on-demand transportation
in Southeast Asia – they were both by far the largest and had the most widespread coverage.
Competition between these two forces was fast and furious – and by all accounts, neck and neck.

Technology

According to Richard Harshman, head of ASEAN Amazon Web Services (AWS), Grab ran on
Amazon’s cloud infrastructure platform. 48 Cloud services such as this allowed an organisation
to quickly and cost effectively scale according to the exponentially growing demand, while at the
same time being able to monitor and access data flows and storage.

Mobile applications were built using a variety of toolkits based on open source programming
languages that supported either iOS or Android devices. An important consideration when
developing an application was challenges related to the quality and accessibility of web services,
the speed and reliability of deployment, error handling and integration with different APIs and
distributed systems. These apps often required a connection to a mobile network, access to

44
Ibid.
45
Rupali Karekar, Singtel's mobile wallet services will come to GrabTaxi app by 2016, “ Straits Times”, December 9, 2015,
http://www.straitstimes.com/business/singtels-mobile-wallet-services-will-come-to-grabtaxi-app-by-2016, accessed April 2016.
46
Colin T ung, GrabT axi and Singtel Partner to offer payments by mobile wallet, “E27”, 09 December 2015,
https://e27.co/grabtaxi-singtel-partner-offer-payments-mobile-wallet-20151209/, accessed March 2016.
47
Singtel Annual Report 2015, http://info.singtel.com/annualreport/2015/performance/management-discussion-analysis.php,
accessed March 2016.
48
Bill Boyle, “Amazon Web Services in Southeast Asia, DatacenterDynamics”, 24 November 2014,
http://www.datacenterdynamics.com/servers-storage/amazon-web-services-in-southeast-asia/92076.fullarticle, accessed April 2016.

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SM U-16-0012 Grab: Discovering New Frontiers for Growth in the Southeast Asian Sharing Economy

numerous sensors, user data and other applications installed on a user’s phone to function. App
companies potentially gained access to extraordinary quantities of user-specific data once a user
installed an application – and managing such torrents of data was a massive challenge in and of
itself.

At the very least, taxi-booking and ride-sharing apps relied on mapping and geo-location features
that were built into smartphones and integrated with other mapping software. Integration with
Google Maps, for instance, could provide route-to-route direction services. An Internet
connection and payment integration features were also important components of the app.

Drivers and passengers for both Uber and Grab app users were algorithmically matched; however
both companies were justifiably guarded as to how exactly this worked, given the proprietary
nature of the code involved and mechanisms used. At a 2015 Strata+Hadoop World conference
in Singapore, Kevin Lee, the vice president of data and growth at Grab, said during his keynote,

If we could build a predictive model of the probability that any given driver would bid or
respond to any particular job, and if we combine that with real time information such as
distance bearing speed, we could direct jobs to a much smaller pool of drivers who are most
likely to be available without having to do any hard behavioral change, such as them having
to indicate their status. Given that it has to run at massive scale, engineering performance
in production [would be] extremely critical for us to get right as well.49

Pricing

Although Uber did not disclose the number of its drivers in Southeast Asia, as of October 2015,
rumours emerged that it was in the ‘hundreds of thousands’. 50

In terms of payment, Uber and Grab started with different, albeit converging approaches. For
example, Grab was the first of the two to offer cash payment options in Southeast Asia, with
Uber eventually following suit. When Uber entered the market with only a debit and credit card
payment mechanism, Grab followed with GrabPay as a cashless payment option also based on
debit and credit cards. 51

Grab and Uber also deployed different pricing models. Uber used a base fare + time + distance
model, with fares increasing in step with demand i.e., variable surge pricing. This helped manage
demand and supply by both attracting new drivers with price surges, and dissuading some
passengers with the hire fares. Grab used base fare + fixed pricing by distance, where fares
increased by a regular fixed amount during peak hours.52 Grab managed demand surges through
a ‘Flash’ feature on the app, which allowed a user to simultaneously request taxis and private
vehicle hires (which could have different fare structures) in order to get a ride faster.53

Both companies offered various referral discounts: promotional codes and coupons via push
notifications.

49
O’Reilly, “How GrabT axi uses machine learning to predict taxi availability | Kevin Lee,” 2 December 2015,
https://www.youtube.com/watch?v=XGyEVWTpJ20&index=3&list=PL055Epbe6d5Zipu8Fx2gw-NcAdtJjt8dq, accessed April
2016.
50
Nadine Freischlad, Uber versus GrabCar: who’s speeding ahead in Southeast Asia?, “Tech In Asia”, 17 October 2015,
https://www.techinasia.com/uber-vs-grabcar-who-is-leading-in-southeast-asia-infographic, accessed April 2016.
51
Ibid.
52
Ibid.
53
GrabT axi introduces “Flash” feature that pools taxi and private hire vehicle drivers, “ Grab News”, 30 November 2015,
https://www.grab.com/sg/press/page/3/, accessed April 2016.

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SM U-16-0012 Grab: Discovering New Frontiers for Growth in the Southeast Asian Sharing Economy

Product

Both Grab and Uber offered nearly identical booking services. The difference lay in the
availability of services in different cities, and the timing in which they began offering their
services in these cities (refer to Exhibit 5 for a comparison of Grab and Uber).

Internal challenges

Grab had experienced explosive growth, and had scaled up from a small start-up team to around
500 employees in about three years.54 It would no doubt be encountering many of the challenges
associated with start-ups during their high-growth phase, such as increasing competitive
pressures to innovate and stay abreast of technology. In addition, access to world-class
engineering talent was limited in Southeast Asia. Tan elaborated,

Here, there are just not that many engineers. The schools are just not built that way to pump
out great computer science engineers. We set up Grabathons, like hackathons, and we all
need to do our part to make sure the whole engineering, data science ecosy stem gets built to
such a size where start-ups can just tap it and be enabled to fly. 55

Grab was also in the process of setting up an engineering office in Seattle to take advantage of
America’s hotbed of innovation and engineering talent in the West Coast tech industry, home to
hundreds of well-known companies such as Google, Apple, Amazon and disruptive upstarts like
DropBox, Uber and Airbnb. In January 2016, Tan announced,

We are excited to announce our new engineering center in Seattle, which will help attract
top talent in the U.S. and expand our global talent reach. As we continue to build an on -
demand ecosystem in Southeast Asia, it is important to look all over the world for innovative
ideas and people that will help us continue to succeed in that mission. 56

Raman Narayanan, a former ‘distinguished engineer’ from Microsoft, joined Grab to lead the
recruitment effort and serve as a technical advisor. 57 Narayanan said,

I looked at the technology that goes into making GrabTaxi operate smoothly and there are
a bunch of really tough computer science problems to be solved when doing this at scale…
As an engineer, it was a very exciting and challenging opportunity.58

54
Nadine Freischlad, T hree years, $340M funding, millions of users: GrabT axi’s Anthony T an reflects on the journey, “Tech In
Asia”, 8 May 2015, https://www.techinasia.com/3-years-4-funding-rounds-grabtaxis-anthony-tan-reflects-journey, accessed March
2016.
55
Sunway Group and Grab founders honoured at Channel NewsAsia Luminary Awards, “Channel News Asia”, March 31, 2016,
http://www.channelnewsasia.com/news/singapore/sunway-group-and-grab/2650464.html, accessed April 2016.
56
Grab, “GrabT axi to Open Engineering Center in Seattle,” January 2016, https://www.grab.com/sg/grabtaxi-to-open-engineering-
center-in-seattle/, accessed April 2016.
57
Ibid.
58
T aylor Soper, GrabT axi opens first U.S. office in Seattle, hires former Microsoft Distinguished Engineer, “ GeekWire”, 13
January 2016, http://www.geekwire.com/2016/grabtaxi-opens-first-u-s-office-seattle-hires-former-microsoft-distinguished-
engineer/, accessed April 2016.

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Regulatory uncertainty

There was concern that ‘access’ companies, like the Airbnbs and Ubers of the world, could
become monopolistic, with value-extraction and private/sensitive information becoming
concentrated in the hands of a few depending on, and proportional to, the extent of their network
effects. 59 Exploitation was another concern, as “what began as a peer-to-peer idealistic and
egalitarian movement has, in some eyes, become a commodifier of other people’s resources.” 60
There was a real fear that these sharing platforms could change the nature of employment in such
a way that most people would become freelancers in a ‘gig’ economy competing on cost in a race
towards the bottom, without the benefits and security of traditional employment.

Policies that governed the sharing economy had yet to catch up, and any regulation that did exist
was still nascent and varied wildly between countries, and even within countries at the municipal
level. As such, these platform-based companies were often exempt from numerous tax codes,
licensing regimes, safety compliance and labour laws because they were facilitators for
individuals to provide peer-to-peer services to each other, and were not the actual providers.
Because of such issues, or potential issues, companies operating in the sharing economy were
attracting the attention of regulators, who in turn were facing mounting political pressure from
incumbent businesses, labour and high profile public-relations disasters.

Some transportation network companies had developed a controversial image largely as a result
of confrontational tactics deployed against both regulators and incumbent taxi companies. 61
Public safety was a serious concern, with numerous reported rape and assault cases. 62 Concerns
arising from safety and regulatory disputes had even resulted in certain ‘ride-sharing’ services
being banned in some countries. 63

However, it was not all doom and gloom. The technologies underlying the sharing economy also
held the promise of equitable sharing of information, power and profits through more networked
individuals and organisations. Collaborative platforms could improve access to goods and
services for those who could not normally afford them by reducing operating costs, increasing
consumption efficiency, reducing environmental impact and building stronger communities. 64

Given the sharing economy’s interwoven fabric of pros and cons, the question was not whether
it would become regulated, but how. This would have profound implications for business models
operating in this space. Transportation network companies faced significant regulatory
uncertainty in countries around the world, including many countries in Southeast Asia.

In December 2014, Teerapong Rodpraser, head of Thailand’s Department of Land Transport,

ordered Uber to cease operations – claiming that the company lacked proper licensing and
discriminated against those who lacked access to credit cards. Uber continued to operate, but

59
Koen Frenken, Toon Meelen, Martijn Arets and Pieter van de Glind, Smarter Regulation for the Sharing Economy, “The
Guardian”, 20 May 2015, https://www.theguardian.com/science/political-science/2015/may/20/smarter-regulation-for-the-sharing-
economy, accessed March 2016.
60
T he Real Sharing Economy, “The Future Agenda”, http://www.futureagenda.org/insight/the-real-sharing-economy, accessed
March 2016.
61
Regulators’ rep slams Uber for confrontational style, “San Francisco Business T imes”, 25 September 2013,
http://www.bizjournals.com/sanfrancisco/blog/2013/09/regulators-rep-slams-ubers.html, accessed April 2016.
Uber confirms 175 sexual assault claims against drivers amid accusations of thousands, “RT”, 9 March 2016,
https://www.rt.com/news/334940-uber-confirms-sexual-assaults/, accessed April 2016.
63
Here’s everywhere Uber is banned around the world, “Business Insider”, 8 April 2015 http://www.businessinsider.com/heres-
everywhere-uber-is-banned-around-the-world-2015-4?IR=T&r=US&IR=T, accessed April 2016.
64
T he Real Sharing Economy, “The Future Agenda”, http://www.futureagenda.org/insight/the-real-sharing-economy, accessed
March 2016.

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SM U-16-0012 Grab: Discovering New Frontiers for Growth in the Southeast Asian Sharing Economy

regulations were put in place to fine unlicensed operators of personal vehicles for commercial
use up to 2,000 Baht (US$5765 ) if caught by police.66

The Philippines and Singapore were the first countries in the region to proactively develop
regulations concerning ride-sharing companies. According to a GrabTaxi spokesperson,

GrabTaxi has always been working with regulators to help create a fair and even playing
field in the local transport industry. Because we’re always engaging with the regulators and
maintaining an open communication channel, we are already mostly compliant with all the
new regulations set forth by the regulator and will definitely be compliant by the stipulated
deadline.67

In July 2015, Grab became the first transportation network company of its kind to be accredited
by the Land Transportation Franchising & Regulatory Board in the Philippines – thus making its
operations recognised and legal. 68 Uber followed shortly thereafter, with both companies
achieving legal status in both the Philippines and in Singapore.

Despite Uber entering Southeast Asia before Grab, Tan believed that Grab had a head start in the
region, stating, “We continue to build that head start, not only with the consumers, not only with
the drivers, but also with the government.” 69

In Malaysia and Indonesia, the legal status of such companies was hotly contested. 70 For
instance, in March 2016, Indonesia’s Transportation Ministry requested the Communications and
Information Ministry to block Uber and Grab apps in response to petitions from drivers of public
transport companies,71 with similar issues arising in Vietnam as well72 . The Transportation
Ministry had previously requested that motorcycle taxi-hailing apps – like GrabBike and GO-
JEK, a Jakarta-based service – be blocked as well. However, widespread public outcry voiced
resistance to such regulations, claiming that such apps improved the broader experience of
transportation for the public. 73

In a March 2016 press release, Uber stated, “We are committed to partnering with the
Government to ensure the full benefits of ridesharing – for riders and drivers – are available, and

65
US$1 = 35.158 T HB, XE Currency Converter, http://www.xe.com/currencyconverter/convert/?From=USD&To=THB, accessed
April 2016
66
Khettiya Jittapong and Manunphattr Dhanananphorn, Uber ordered to cease operations in T hailand, under scrutiny in Vietnam,
“ Reuters”, 9 December 2014, http://www.reuters.com/article/us-thailand-uber-idUSKBN0JN0PZ20141209, accessed April 2016.
67
T erry Xu, GrabT axi: New regulatory policy will not affect its operation, “The Online Citizen”, 21 May 2015,
http://www.theonlinecitizen.com/2015/05/grabtaxi-new-regulatory-policy-will-not-affect-operations/, accessed April 2016.
68
Judith Balea, GrabCar gets government license to roll in the Philippines, “Tech In Asia”,
https://www.techinasia.com/grabcar-transportation-network-company-accreditation-philippines, accessed April 2016.
69
Christine T an, GrabT axi CEO says local knowledge is key for ride-hailing apps taking on Uber, “CNBC”, 14 January 2016,
http://www.cnbc.com/2016/01/14/grabtaxi-ceo-anthony-tan-says-local-knowledge-is-key-for-ride-hailing-apps-taking-on-
uber.html, accessed April 2016.
70
Nadine Freischlad, Uber vs GrabCar: who’s speeding ahead in Southeast Asia?, “Tech In Asia”,
https://www.techinasia.com/uber-vs-grabcar-who-is-leading-in-southeast-asia-infographic, accessed April 2016.
71
Arientha Primanita, Transportation ministry requests Uber, Grab T axi ban, “The Jakarta Post”, 21 March 2016,
http://www.thejakartapost.com/news/2016/03/14/transportation-ministry-requests-uber-grab-taxi-ban.html, accessed April 2016.
72
Nguyen T hi Bich Ngoc, Vietnam cab lobby urges state to deactivate ride-hailing apps Uber, GrabT axi, “ Deal Street Asia”, 26
October 2015, http://www.dealstreetasia.com/stories/uber-grabtaxi-face-threat-of-deactivation-in-vietnam-16952/, accessed April
2016.
73
Ibid.

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we remain committed to Indonesia.” 74 That same month Grab and Uber became ‘cooperative
legal entities as transport companies under the provisions on public transport’. 75

On dealing with the regulatory environment, Travis Kalanick, the co-founder and CEO of Uber,
said in 2013,

The regulatory systems in place disincentivise innovation. It's intense to fight the red tape…
[on offering advice] Stand by your principles and be comfortable with confrontation. So few
people are, so when the people with the red tape come, it becomes a negotiation… my politics
are: I'm a trustbuster. Very focused. And yeah, I'm pro-efficiency. I want the most economic
activity at the lowest price possible. It's good for everybody.76

Regardless of any real or perceived tactics deployed by either Grab or Uber to influence
regulations, both companies engaged directly with governments. But no matter how closely these
companies engaged government, as anyone familiar with Southeast Asia would know, the
political mood in the region could change quickly and abruptly.

Cautious optimism for a region on the rise

By 2016, Southeast Asia faced socio-economic risk associated with financial globalisation ,
environmental degradation, climate change, rising levels of informal employment, increasing
dependency ratios, and an unequal division of labour between genders across the region. 77

Nonetheless, Southeast Asia was also experiencing steady growth and a rapidly growing middle -
class characterised by high levels of aspiration and technological adoption. The number of
middle-class households was expected to rise from 40 million in 2010 to 80 million in 2017. 78
However, this growth had unfortunately affected society disproportionally, with more vulnerable
groups being left behind. 79

The population was young. 36% of the population of ASEAN was below the age of 20 in 2015. 80
Singapore was the outlier, which was experiencing a rapidly ageing population coupled with one
of the lowest birth rates in the world. But regardless of age, there was thus considerable need for
quality education and demand for skills training, which at the same time was culturally valued.

As these aspiring populations became more affluent, vehicle ownership surged, putting
tremendous stress on transportation infrastructure – which, in any case, was well over-capacity
in most urban agglomerations. With perhaps the exception of Singapore, rapid mass-public
transportation was under-provided in most cities throughout the region, which had thus become
famous for traffic jams. Collecting and analysing transportation data was important for managing

74
Uber committed to working with Indonesian Government to ensure full compliance with regulations and continued safe, reliable
transport, “Uber Newsroom”, 19 March 2016, https://newsroom.uber.com/indonesia/id/uber-committed-to-working-with-
indonesian-government-to-ensure-full-compliance-with-regulations-and-continued-safe-reliable-transport/, accessed April 2016.
75
End of standoff? GrabCar, Uber register as legal cooperatives allowing them to operate in Indonesia, “Deal Street Asia”, 16
March 2016, http://www.dealstreetasia.com/stories/grabcar-34329/, accessed April 2016.
76
Andy Kessler, T ravis Kalanick: T he Transportation Trustbuster, “The Wall Street Journal”, 25 January 2013,
http://www.wsj.com/articles/SB10001424127887324235104578244231122376480 , accessed April 2016.
77
David D. Arnold, T he Critical Issues Affecting Asia, “The Asia Foundation”, 22 January 2014, http://asiafoundation.org/in-
asia/2014/01/22/the-critical-issues-affecting-asia/, accessed April 2016.
78
Nadine Freischlad, Uber vs GrabCar: who’s speeding ahead in Southeast Asia?, “Tech In Asia”,
https://www.techinasia.com/uber-vs-grabcar-who-is-leading-in-southeast-asia-infographic, accessed April 2016.
79
Changyong Rhee, Inequality Threatens Asia’s Growth Miracle, “ Financial T imes”, 7 May 2012,
http://www.ft.com/intl/cms/s/0/fba71e2c-9607-11e1-9d9d-00144feab49a.html#axzz47HApSuOr, accessed April 2016.
80
Ibid.

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traffic conditions. Accommodating rapid urbanisation was hence a major challenge in regards to
all manner of infrastructure.

There was a wide disparity between income levels and economic systems practices in ASEAN
countries, as well as in the style and quality of government. Persistent issues pertaining to the
rule of law, governance and corruption in most jurisdictions were common within the region.
This posed serious issues for implementing social protection programmes, providing quality
healthcare systems, reducing inequality and eliminating poverty. That said, new frontiers awaited
those who could seize opportunities at the bottom-of-the-pyramid by doing good well.

Resilience and riches

Grab’s social mission to improve the lives of customers, drivers and the wider community was a
broad mandate. But simply funding any feel good initiative was not good business. Grab needed
to leverage its capabilities, core product and expertise towards a triple-bottom line – and in doing
so, work towards solving real-world problems that were aligned with the company’s mission.

At the same time, Grab needed to stay ahead of technological, regulatory and social trends, and
accelerating change. This was even more complicated due to the degree of fragmentation across
Southeast Asia’s many markets.

The on-demand transportation industry, and the sharing economy in general, were extremely
competitive. New entrants and future champions could emerge from anywhere. Grab would have
to continuously innovate and avoid becoming encumbered by its own size, while overcoming the
internal challenges associated with high-growth start-ups.

For Grab to become truly sustainable and succeed in the long run, the company would need to
secure an indispensable place in the larger ecosystem in which it operated; an essential node in
the new economy.

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EXHIBIT 1: PROFILE OF THE SHARING ECONOMY

C2C

On-Demand Second-Hand
Economy Economy
The
Sharing
Economy
Access Goods

Product-Service
Economy
Note: Definition of C2C is ‘consumer to consumer’

S ource: The Guardian, https://www.theguardian.com/science/political-science/2015/may/20/smarter-

regulation-for-the-sharing-economy, accessed March 2016.

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EXHIBIT 2: GROWTH PROJECTIONS FOR THE SHARING ECONOMY

Global sharing economy and traditional rental sector projected revenue growth

$400
Sharing economy sector
$335 $335
$350
$300  P2P lending and
crowd-funding
In US$ Billions

$240
$250  Online staffing
$200  P2P accommodation
 Car sharing
$150  Music and video
$100 streaming
$50 $15
$0 Traditional rental sector
2013 2025
 Equipment rental
Sharing Economy Sector Traditional Renting Sector
 B&B and hostels
 Book rental
 Car rental
 DVD rental
Sharing economy projected growth by sector
70%
60%
63%
50% P2P lending and crowd-funding
40% Online staffing
30% 37% P2P Accommodation
31%
20% Car Sharing
23%
10% 17% Music and video streaming

0%
Revenue CAGR, 2013-2025
S ource: PwC, The S haring Economy – S izing the Revenue,
http://www.pwc.co.uk/issues/megatrends/collisions/sharingeconomy/the-sharing-economy-sizing-the-revenue-
opportunity.html, accessed March 2016

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EXHIBIT 3: NEW CONCEPTS OF VALUE IN THE SHARING ECONOMY

Social Influence
Open Source Software
Microfinance
Storage of Value
Creation of Value Micro-patronage

Human Capital Investment

Digital Currencies
P2P Lending

Content Creation Open Innovation Complimentary Currencies

Group Buying Marketplaces

Wikis
Co-working
Exchange Platforms
Skill Sharing
Crowd-sourced
Knowledge Sharing
Labour
Resource Sharing
Co-Production

Barter Networks

Gift Networks Rental Networks

Access to Value

S ource: Emergence Collective, The Future of Money Project, New Lenses of Wealth,
http://www.emergence.cc/2010/12/new-lenses-of-wealth/, accessed March 2016.

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EXHIBIT 4: SOUTHEAST ASIA - KEY ISSUES, TRENDS AND INDICATORS

Top 10 Largest Urban Areas in Southeast Asia, 2015

Rank City Population

1 Mega Manila 35,607,000 (2010 est.)
2 Greater Jakarta 28,000,000 (2010 est.)
3 Greater Bangkok 20,000,000 (2010 est.)
4 Ho Chi Minh City 7,785,000
5 Kuala Lumpur 5,835,000
6 Singapore 5,674,472
7 Yangon 4,400,000
8 Bandung 3,555,000
9 Surabaya 2,885,000
10 Hanoi 2,355,000

S ources: Philippine Information Agency, The World Bank, CIA World Factbook

Demographic Indicators by country, 2015 estimates

Country Population Ethnic Groups Languages Religions

Brunei 429,646 Malay (65.7%) Malay (official) Muslim (78.8%)
Chinese (10.3%) English Christian (8.7%)
Other (24%) Chinese dialects Other (24%)

Cambodia 15,708,756 Khmer (90%) Khmer (official) Buddhist (96.3%)

Vietnamese (5%) Muslim (1.9%)
Chinese (1%) Christian (0.4%)
Other (4%) Other (0.8%)

Indonesia 255,993,674 Javanese (40.1%) Bahasa Indonesia, Muslim (87.2%)

Other (59.9%) a modified form of Christian (9.9%)
Malay (official) Hindu (1.7%)
English Other 1.3%
Dutch
700+ languages

Laos 6,911,544 Lao (54.6%) Lao (official) Buddhist (66.8%)

Khmou (10.9%) French Christian (1.5%)
Hmong (8%) English Other (31.7%)
Other (27%) Other

Malaysia 30,513,848 Malay (50.1%) Malay (official) Muslim (61.3%)

Chinese (22.6%) English Buddhist (19.8%)
Indian (6.7%) Chinese dialects Christian (9.2%0
Other 20.7% Thai Hindu (6.3%)
Other Other (3.5%)

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Myanmar 56,320,206 Burman (68%) Burmese (official) Buddhist (89%)

Shan (9%) Each ethnic group Christian (4%)
Karen (7%) has its own Muslim (4%)
Other (16%) language Other (3%)

Philippines 100,998,376 Tagalog (28.1%) Filipino, Tagalog Christian (92.5%)

Cebuano (13.1%) based (official) Muslim (5%)
Ilocano (9%) English (official) Other (2.5%)
Other (49.8%)

Singapore 5,674,472 Chinese (74.2%) Mandarin (official) Buddhist (33.9%)

Malay (13.3%) English (official) Christian (18.1%)
Indian (9.2%) Malay (official) None (16.4%)
Other (3.3%) Tamil (official) Muslim (14.3%)
Taoist (11.3%)
Hindu (5.2%)
Other (0.7%)

Thailand 67,976,405 Thai (95.9%) Thai (official) Buddhist (93.6%)

Other (4.1%) Several other, Muslim (4.6%)
English widely Christian (1.2%)
spoken among elite Other (0.3%)

Vietnam 94,348,835 Viet (85.7%) Vietnamese None (80.8%)

Other (14.3%) (official) Buddhist (9.3%)
Christian (7.2%)
Other (9.7%)
S ource: CIA World Factbook, https://www.cia.gov/library/publications/the-world-factbook/, accessed April
2016.

Demographic Indicators by country (continued), 2015 estimates

Country Median age Life Population growth School life

Expectancy rates & fertility rate expectancy

Brunei 29.6 years 74.64 (male) 1.62% annual 14 years (male)

79.41 (female) population growth 15 years (female)
1.8 born per woman

Cambodia 24.5 years 61.69 (male) 1.58% annual 12 years (male)

66.7 (female) population growth 10 years (female)
2.6 born per woman

Indonesia 29.6 years 69.85 (male) 0.92% annual 13 years (male)

75.17 (female) population growth 13 years (female)
2.15 born per woman

Laos 22.3 years 61.88 (male) 1.55% annual 11 years (male)

65.95 (female) population growth 11 years (female)
2.82 born per woman

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Malaysia 27.9 years 71.97 (male) 1.44% annual 13 years (male)

77.93 (female) population growth 13 years (female)
2.55 born per woman

Myanmar 28.3 years - 63.89 (male) 1.01% population 9 years (sex

- 68.82 (female) growth unspecified)
2.16 born per woman

Philippines 23.2 years 65.47 (male) 1.61% annual growth 11 years (male)
72.62 (female) 3.09 born per woman 11 years (female)

Singapore 34 years 82.06 (male) 1.89% annual growth Unavailable

87.5 (female) rate
0.81 born per woman

Thailand 36.7 years 71.24 (male)- 0.34% annual 13 years (male)

77.78 (female) population growth 13 years (female)
1.51 born per woman

Vietnam 29.6 years 70.69 (male) 0.97% annual Unavailable

75.9 (female) population growth
1.83 born per woman

S ource: CIA World Factbook, https://www.cia.gov/library/publications/the-world-factbook/, accessed April

2016.

Economic Indicators by country, 2015

Country GDP per capita Labour Force and Dependency Urbanisation %

(annual) % unemployment ratios, % pop. pop. and %
annual change

Brunei US$79,700 205,800 38% 77.2% of total pop.

2.7% Youth (31.9%) 1.79% decrease
unemployment Elderly (6.1%) (2010-2015)

Cambodia US$3,500 7.974 million 55.6% 20.7% of total pop.

0.3% Youth (49.2%) 2.65%
unemployment Elderly (6.4%) (2010-2015)

Indonesia US$11,300 122.4 million 49% 53.7% of total pop.

5.5% Youth (41.2%) 2.69%
unemployment Elderly (7.7%) (2010-2015)

Laos US$5,400 3.532 million 62.8% 38.6% of total pop.

1.4% Youth 56.6% 4.93%
unemployment Elderly 6.2% (2010-2015)

Malaysia US$26,000 14.3 million 43.6% 74.7% of total pop.

2.7% Youth 35.2% 2.66%
unemployment Elderly 8.4% (2010-2015)

Myanmar US$5,200 36.18 million 49.1% 34.1% of total pop.

5% unemployment Youth 41.1% 2.49%
Elderly 8% (2010-2015)

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Philippines US$7,500 41.75 million 57.6% 44.4% of total pop.

6.5% Youth 50.3% 1.32%
unemployment Elderly 7.2% (2010-2015)

Singapore US$85,700 3.588 million 37.4% 100% of total pop.

2% unemployment Youth 21.4%
Elderly 16.1%
Thailand US$16,100 39.12 million 39.2% 50.4% of total pop.
1% unemployment Youth 24.7% 2.97%
Elderly 14.6% (2010-2015)
Vietnam US$6,100 54.93 million 42.5% 33.6% of total pop.
3% unemployment Youth 32.9% 2.95%
Elderly 9.6% (2010-2015)

Note: the rate of urbanisation increased for all countries except Brunei

S ource: CIA World Factbook, https://www.cia.gov/library/publications/the-world-factbook/, accessed April

2016.

Transportation Safety Indicators, 2010 estimates

Road Traffic Deaths Death by Vehicle type

Country Total Death rate 4- 2-wheel/ Cyclists Pedestrian Others
(per wheeled 3-wheel
100,000)
Brunei … … … … … … …
Cambodia 2,431 17 11.8 66.6 4 12 5.7

Indonesia 42,434 18 6.1 35.7 1.7 21.1 35.4

Laos 1,266 20 14.6 74.4 1.3 6.3 3.4

Malaysia 7,085 25 26.0 58.7 2.8 9.1 3.4

Myanmar 7,177 15 26.2 22.9 8.6 26.5 15.9

Philippines 8,499 9 … … … … …

Singapore 259 5 8.8 46.1 8.3 28.5 8.3

Thailand 26,312 38 13.3 73.5 3.0 7.8 2.5

Vietnam 21,651 25 … … … … …

S ource: Asian Development Bank, http://www.adb.org/sites/default/files/publication/175162/ki2015-rt-

transport-communications.pdf, accessed April 2016.

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Digital Landscape Southeast Asia

Internet use by population, social media and mobile access

Country % Population % Population monthly % Users logging on social

Internet users active social media users media with a mobile device
Brunei 81% 69% 64%

Cambodia 32% 22% 19%

Indonesia 34% 31% 26%

Laos 14% 14% 12%

Malaysia 67% 59% 52%

Myanmar 9% 14% 11%

Philippines 46% 47% 39%

Singapore 84% 67% 61%

Thailand 54% 58% 52%

Vietnam 50% 40% 32%

Note: Global average is 44% versus S outheast Asia average of 40%

S ource: Tech in Asia, https://www.techinasia.com/talk/digital-southeast-asia-q4-2015, accessed April 2016.

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Smartphone Penetration, 2014-2019

Smartphone users in millions

Country 2014 2015 2016 2017 2018 2019

Indonesia 44.7 55.4 65.2 74.9 83.5 99.0

Malaysia 8.9 10.1 11.0 11.8 12.7 13.7

Philippines 21.8 26.2 29.9 33.3 36.5 39.2

Singapore 3.8 4.0 4.2 4.3 4.4 4.6

Thailand 15.4 17.9 20.0 21.9 23.4 24.8

Vietnam 16.6 20.7 24.6 28.6 32 35.2

Smartphone users by % of total population

Country 2014 2015 2016 2017 2018 2019

Indonesia 32.6% 37.1% 40.4% 43.2% 45.4% 47.6%

Malaysia 42.6% 46.6% 49.2% 51.3% 54.3% 57.3%

Philippines 32% 36.6% 40.0% 43.1% 46.1% 48.4%

Singapore 83.1% 85.2% 86.3% 87.2% 88.0% 88.9%

Thailand 34.9% 39.2% 42.8% 45.8% 48.1% 50.0%

Vietnam 30.4% 36.2% 41.5% 46.8% 50.9% 54.6%

Note: Use of smartphone indicates high-speed connectivity via 2G, 3G and 4G technologies as ownership is
often subsidised through broadband subscription. Although Wi -Fi is an option, populations across S outheast
Asia are demanding greater mobile broadband coverage. Adoption and coverage coincides with urbanisation
and urban areas.

S ource: eMarketer, http://www.emarketer.com/Article/Asia-Pacific-Boasts-More-Than-1-Billion-

S martphone-Users/1012984, accessed April 2016.

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Mobile Payments and Banking

Select results from Deloitte Global Mobile Consumer Survey

Have you ever used your phone to check bank balances?

(Responding with yes)

Indonesia 56%

Philippines 30%

Singapore 52%

Thailand 36%

Mobile Payments and Banking (continued)

Have you ever used your phone to make online purchases?

(Responding with yes)

Indonesia 30%

Philippines 21%

Singapore 38%

Thailand 22%

Willingness to use mobile-based in-store payment solutions

Indonesia 76%

Philippines 59%

Singapore 57%

Thailand 57%

S ource: Deloitte, http://www2.deloitte.com/content/dam/Deloitte/sg/Documents/technology-media-

telecommunications/sg-tmt-global-mobile-consumer-survey-noexp.pdf, accessed April 2016.

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EXHIBIT 5: COMPARISON OF UBER AND GRAB, AS OF MAY 2016
Uber
Founded: San Francisco, California, USA
Valuation: US$50 Billion
Total Funding: US$8.21 Billion
Latest Funding Round: September 2015
Co-Founder CEO: Travis Kalanick
- Born 1976
- Education Computer Science (drop out),
University of California
Description of Service Offerings:
uberTaxi: app-based function on-demand e-
hailing for taxis
uberX: GrabCar: app-based function for on-
demand private vehicle hire, 6-seater
uberMOTO: app-based function for on-
demand motorcycle taxi service
uberXL: app-based function for on-demand
private vehicle hire for large vehicles like
vans
uberBLACK/EXEC: app-based function for
on-demand premium private vehicle hire
EXECLARGE: app-based function for on-
demand private vehicle hire for premium
large vehicles
SUV: app-based function for on-demand
SUV private vehicle hire
UberHOP: app-based function for
ride/sharing-carpooling
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Grab
Founded: Malaysia
Valuation: US$1.5 Billion
US$ 680 Million
Latest Funding Round: August 2015
Co-Founder CEO: Anthony Tan
- Born 1981
- Education: Master of Business
Administration, Harvard Business School
Description of Service Offerings:
GrabTaxi: app-based function on-demand e-
hailing for taxis
GrabCar: app-based function for on-demand
private vehicle hire, 6-seater (includes
GrabCar+ app-based function for premium
vehicles and 13 seater vans)
GrabBike: app-based function for on-
demand motorcycle taxi service
GrabHitch: app-based function for
ride/sharing-carpooling
GrabExpress: app-based function for on-
demand courier services
SM U-16-0012 Grab: Discovering New Frontiers for Growth in the Southeast Asian Sharing Economy

Availability of Service Offerings: Availability of Service Offerings:

Indonesia Indonesia
(UberX) (GrabTaxi, GrabCar, GrabBike,
- Bali GrabExpress)
- Bandung - Bali
- Jakarta (also offers UberBLACK) - Bandung
- Surabaya - Jakarta
- Padang
- Surabaya
Malaysia
(uberX) Malaysia
- Ipoh (GrabTaxi, GrabCar)
- Johor Baru (also offers uberXL) - Johor Baru - Negeri Sembilan
- Kuala Lumpur (also offers uberBLACK, - Kota Kinabalu - Penang
uberXL) - Kuala Lumpur - Putrajaya
- Penang (also offers uberXL) - Kuching - Selangor
- Malacca
Philippines
(uberX) Philippines
- Cebu (GrabTaxi, GrabCar, GrabBike,
- Manila (also offers uberBLACK and GrabExpress)
uberHOP) - Bacolod - Iloilo
- Baguio - Manila
- Cagayan de Oro
- Cebu
Singapore - Davao City
(uberX, uberXL, uberEXEC, EXECLARGE,
uberTaxi) Singapore
(GrabTaxi, GrabCar, GrabHitch)
Thailand
(uberX, uberBLACK, uberMOTO) Thailand
- Bangkok (GrabTaxi, GrabCar, GrabBike,
GrabExpress)
Vietnam
(uberX, uberBLACK, SUV) - Bangkok
- Hanoi - Chiang Mai
- Ho Chi Minh City - Chiang Rai
- Phuket
- Pattaya

Vietnam
(GrabTaxi, GrabCar, GrabBike,
GrabExpress)

- Danang
- Hanoi
- Ho Chi Minh City

Payment: Payment:

Credit/Debit Card or Cash (Bandung, Johor Credit/ Debit Card (Malaysia, Manila,
Baru, Manila and Singapore only) Indonesia and Singapore only) or Cash

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Pricing: Pricing:

Base Fare + Time & Distance (fares Base Fare + Fixed Pricing (fares increased
increased in step with demand increase i.e. by regular fixed amount during peak hours)
variable surge pricing)

S ources: Uber, https://www.uber.com/, accessed April 2016, Grab, http://www.grab.com/sg/, accessed April
2016; Nadine Freischlad, “Uber vs GrabCar: who’s speeding ahead in S outheast Asia?” (Infographic) 17
Tech in Asia, October 2015, www.techinasia.com, accessed April 2016; Michael Tegos, “Uber launches cash
payments in S ingapore” Tech in Asia, 6 April 2016, www.techinasia.com, accessed April 2016; Terence Lee,
“Uber tests cash payments in Malaysia,” Tech in Asia 12 March 2016, www.techinasia.com, accessed April
2016; S teven Millward, “Uber begins taking cash payments in Indonesia,” Tech in Asia, 5 November 2015,
www.techinasia.com, accessed April 2016; Judith Balea, “Manila Uber riders may now pay with cash,” Tech
in Asia, 3 November 2015, www.techinasia.com, accessed April 2016.

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