While Uber was building itself in the US and slowly making its mark around the world. Grab set up shop in Kuala Lumpur, Malaysia, back in 2012 and started to carve out its empire in Asia. Grab as founded by two Harvard students that liked the ridesharing idea that Sidecar and Uber presented, so they decided to do the same. Now, after 6 years of operation and over $2.5 billion from investors, including SoftBank, Didi, and Hyundai, Grab is South East Asia's largest gig economy and startup. Its market value is now set around the $6 billion mark.
What Grab has been doing in the last 6 years is work out the cultural and economic issues that face companies who rely on e-payment systems in an area where the majority of customers might not have a credit card, at best maybe a (top-up) debit card. Add to this the fact that the founders are both Malaysian and understand the cultural differences found in South East Asia, which are complex and differing between counters in the area. Uber has been unsuccessful in conquering these markets mainly due to Grab's presence and also due to Uber's inability to understand local nuances.
While Uber uses the same app everywhere, Grab developed a more fluid approach. They realized that the population in the Philippines is totally different from that in Vietnam or Singapore. Grab also had to teach their driving community how to use smartphones, as well as teach them how to set up digital accounts for receiving their income. Add to that the fact that customers didn't have a means to pay, Grab started out with cash, something that took Uber 2 years to realize.
Since Grab allowed drivers to take cash, it made Grab a favorite in the market. After they started to introduced drivers to smartphones and helped them to understand how to operate the app, they also helped them buy smartphone models in easy payment schemes. This built a strong infrastructure based on loyalty. In the meantime, Grab invested heavily in developing an e-wallet infrastructure and creating partnerships with financial institutions around the area. Effectively, they built up an entire e-commerce echo system to support their ridesharing operations, something that comes as both an added benefit to their operations as well as a separate payment tool to be used for other services. The effects of Grab’s e-commerce infrastructure now allows customers to use their payment system to buy food, gas, meals in restaurants and fast food joints such McDonald’s.
Anthony and Hooi Ling Tan, no relations to each other, operate their business form a Singapore based HQ and employ a large team of software developers, most of whom had experience working with Google, Facebook and Amazon. Grab needs to constantly bolster its technology and presence, especially when countering competition other than Uber. For instance, Go-Jeck is an Indonesian rideshare company that just raised $1.2 billion from Google and some Chinese investors, which goes to show that this new company will prove to be a major threat to Grab's superiority in the region.
According to a report on the Asian based ridesharing economy, it will quadruple over the next 7 years to a $20 billion economy. The market already doubled in value during the past two years and is now set around the $5 billion mark.
Uber continues to lose money, especially in Asia. With Ola in India, Didi in China and Grab in Singapore, Malaysia, and the Philippines. Uber's future looks bleak in the area. Add to this SoftBank's insistence that Uber concentrates on their home and European market, Ola's impressive entrance into Australia (based on the Indian driver community there). it seems that CEO Dara Khosrowshahi will have to streamline their global presence.
It is possible that Uber will try to find a partner in Asia, someone that when combined will provide a major block to Ola and Didi, as well as rising stars such as Go-Jeck. This seems to be Grab, although we cannot discount any of the new or current competitors that have both ridesharing platforms and integrated payment systems such as Go-Jeck's GoPay system, and Ola who has Ola Pay. Having stated this, there is backroom chatter suggesting that Uber and Grab will join forces soon. This is not a new position for Uber to find itself in; it previously transferred its Chinese presence to Didi Chuxing for a 20% stake in the operations there. This option is compounded when considering the presence of SoftBank on both Uber and Grab's executive board.