Ride-hail services around the world have been hard hit by the COVID-19 pandemic, and Grab was no exception. The company is one of the most highly valued technology startups in Southeast Asia, where it operates in eight countries. The transport business declined sharply in March and April as movement restriction orders were implemented.
However, the company had the advantage of already operating several on-demand logistics services. During the hiatus, Grab’s Group Managing Director of Operations Russell Cohen spoke about how the company has adapted its technology for an unprecedented crisis (video embedded below).
“We sat down as a leadership group at the beginning of the crisis and found, especially in Southeast Asia, that the scale of the challenge was so great,” said Cohen.
With the Grab driver app, they were already able to switch between hail trips and on-demand delivery requests. As a result of COVID-19, more than 149,000 drivers began on-demand deliveries for the first time, with Singapore, Malaysia and Thailand seeing the most conversions. That number included tens of thousands of new drivers who joined the platform to offset lost profits during the pandemic.
The challenge was to expand delivery services to meet the dramatically increasing demand from consumers and also from retailers who needed a new way to reach customers. In March and April, Cohen said nearly 80,000 small businesses had joined his platform. Many had never sold online before, so Grab expedited the release of a self-service feature that made it easier for traders to get themselves on board.
“This is a massive sector of the Southeast Asian economy that has been effectively digitized within weeks,” Cohen said.
Many of the new merchants had previously only made cash payments, so Grab had to set them up for digital payments. This has been made easier because the company’s finance department, Grab Financial, already offers services like Grab Pay for cashless payments, mobile wallets, and wallet wire transfer services.
Grab also released a new suite of tools called Grab Merchant that enables merchants to start online businesses by filing licenses and certifications online. It includes functions like data analysis.
Modeling for uncertainty in the “new normal”
Part of Grab’s COVID-19 strategy has been to work with local communities and governments in various countries to make deliveries more efficient. Working with the Singaporean government, for example, expanded a pilot program called GrabExpress Car, originally launched in September, which allowed more of Grab’s hail vehicles to be used for food and grocery delivery. So far, many of these deliveries have only been made by motorcycles.
The situation in each of the Grab markets – Singapore, Cambodia, Indonesia, Malaysia, Myanmar, Philippines, Thailand and Vietnam – is evolving. Some markets have lifted lockdown orders while others continue to deal with new breakouts.
Cohen said the hail is gradually recovering in many of Grab’s markets. However, the company is preparing for an uncertain future by modeling different scenarios, considering possible reconnections and permanently changing the behavior of consumers and retailers.
“Unpredictability is something we think about a lot,” said Cohen. Models include models where deliveries are a much larger part of the business, as customers prefer to shop online even in countries where movement restrictions have been lifted.
COVID-19 has also accelerated the adoption of digital payments in several of Grab’s markets. For example, Grab launched its GrabPay card in the Philippines three months ago as more and more people are using contactless payments in response to COVID-19 concerns.
In terms of on-demand deliveries, GrabExpress is expanding its same-day courier service and adapting technology originally developed for ride pooling to help drivers schedule pickups and deliveries more efficiently. This will help reduce the cost of delivery services as consumers remain price conscious due to the economic impact of the pandemic.
“Shopping behavior has changed, so when we think of the supply side and the driver side, we need to make sure our fleet is flexible,” he said.