Grab Dangles Major Carrot At ComfortDelGro Cabbies
In its most aggressive move yet, Grab is offering money to ComfortDelGro cabbies to defect to any of the ride-hailing company’s taxi partners — which is basically every other Singaporean taxi company. SMRT, TransCab, Prime, and Premier cabs currently all allow bookings via Grab’s GrabTaxi option, and are set to benefit from this latest measure. Grab is offering a $50 rental discount per day to cabbies who make the switch by 15 Sept. This means average savings of about $1,500 a month, an amount of which could go a long way in persuasion.
Even better, Comfort drivers who switch to a Grab-rented private car will get $1,688 per month if they complete at least 20 trips a week.
However, good times don’t always last, and free money doesn’t either. These promos are available for only 6 months after sign up.
For comparison, rent for SMRT’s Toyota Prius starts at $118 daily, which means savings of about 42%.
With news of these massive discounts, cabbies flooded Grab’s office, and it looked like the Great Singapore Sale was happening.
Defectors aren’t usually looked upon kindly, but this time it’s perfectly understandable.
Spending $1,500 over 6 months means a total subsidy of $9,000 for each cabby Grab manages to convert. In business terms, this means Grab is expecting a return of more than $9,000 from each convert for this entire scheme to make sense.
But here’s the important question: Where is Grab getting all this money from?
Where is Grab getting all this money from?
Simply put, investors.
On 30 Aug, Toyota (yes, that Toyota that makes cars) invested an undisclosed amount in Grab, with the objective of “optimis(ing) the performance of Toyota vehicles within Grab’s driver platform.” This follows news from July 2017 that China’s Didi Chuxing and Japan’s SoftBank will be investing a combined US$2 BILLION in the app.
That’s a BILLION. With a B.
All of a sudden, $9,000 per driver doesn’t seem all that much, with US$2 billion in their pockets.
No wonder they’ve got money to throw around.