Why is ride-hailing so popular across Southeast Asia?

Ride-hailing has revolutionised the way people travel and commute. Before we delve deeper into ride-hailing, we will first introduce what it is all about. Ride-hailing is when a customer uses an app to “hail” or hire a local driver to take them wherever they need to go. Typically, riders can order these trips on-demand or schedule them in advance.

Ride-hailing was popularised in 2009 by Uber, the first successful ride-hailing company to successfully disrupt modern transportation models and transformed the way people travelled. Today, Uber is the largest ride-sharing company globally. Ever since their establishment, there have been many other ride-hailing startups across the globe.

The love for ride-hailing services is unquestionable. It brings about a more convenient and efficient way of travelling for consumers. It is especially so in Southeast Asia because local demands foster an environment for the success of ride-hailing services.

Top ride-hailing companies in Southeast Asia

In 2021 alone, the ride-hailing industry amounted to approximately USD 13 billion (S$18 billion) in Southeast Asia.

Ride-hailing has become an integral part of society in Southeast Asia and consumers are increasingly reliant on such services for their day-to-day activities. Notable companies include Grab, Gojek, Blue Bird, MyCar, Angkas, Comfort, LineTaxi, Becar/Bebike and many more. However, based on research done by Blackbox the top four most often used ride-hailing apps in Southeast Asia are:

1. Grab
2. Gojek
3. Comfort
4. Becar/Bebike

Grab

Founded in Malaysia, Grab is one of Southeast Asia's most valuable tech unicorns operating in eight markets across this region. Wonder how Grab managed to expand so quickly?

Firstly, Grab's technological innovations have allowed them to be one step ahead of their competitors. Secondly, their commitment to customer service has made them a popular choice for consumers in Southeast Asia. Lastly, their product offerings are second to none in this region.

Typical ride-hailing companies only offer transport services. Apart from ride-hailing, Grab also provides other services to its consumers through its super app. Want to order food in for lunch? You can do so through GrabFood. Need to deliver something urgently to your friends? You can utilise GrabExpress. Too busy to go to the supermarket? You can buy your groceries through GrabMart. With all that Grab offers, it is undoubtedly Southeast Asia's ride-hailing giant.

Gojek

Established in Indonesia, Gojek is a technology startup that specialises in ride-hailing services, logistics, and digital payments. Gojek is known for its affordable prices and regular promotions and its promotional strategies have made them Southeast Asia's second-largest market player.

In Singapore, Gojek offered free rides to vaccinations centres in 2021. They also have extensive promotional campaigns that offer unmatched discounts for their customers. For example, Gojek has an ongoing "9-5" campaign, offering 50 per cent off (capped at $5) for five rides from 9am-5pm on weekdays in Singapore.

5 reasons why ride-hailing is popular across Southeast Asia

1. Rapid urbanisation in the region

In recent decades, there has been a rapid increase in urbanisation and population growth in many Southeast Asian regions. As a result, there has been an increasing need for better transportation infrastructure to accommodate rising demands. Better transportation infrastructure requires significant investment. Hence, the introduction of ride-hailing services helps to meet this growing need.

2. Cheaper alternative for commute

Why do consumers prefer ride-hailing over traditional taxi services? Well, it is a cheaper alternative. Who doesn't love to save money, right? Many ride-hailing companies offer frequent promo codes for their consumers. With promo codes, riders can save money with discounted fares.

Moreover, ride-hailing is a cheaper alternative to owning a car in some countries such as Singapore. In February 2022, Certificate of Entitlement (COE) prices reached a nine-year high for Category B and Open Category sales.

Moreover, the true cost of owning and operating a car is more than what most people think. Apart from registration costs and excise duty fees, vehicle owners also have to factor in parking fees, which can be pricey. With ride-hailing services, consumers can save money on buying a car.

3. Government initiatives and support

The success of ride-hailing services is also due to government support in some countries. For example, the Singapore government has encouraged the adoption of ride-hailing services throughout the nation. The government recently granted Ryde, a ride-hailing company, their carpool service license. This is indicative of their support for ride-hailing services.

The government is doing so in line with their car-lite master plan. Singapore is moving towards a "car-lite society" to reduce car ownership, mitigate congestion and reduce carbon footprint. It will mean an increase in reliance on ride-hailing services and public transport.

4. Increase convenience for customers

In several Southeast Asia regions, there is a lack of public transportation. Despite the development of public transport by the government, many areas are still inaccessible due to geographical constraints. Hence, many people rely on ride-hailing services to travel. Ride-hailing services allow people to travel to previously inaccessible places.

Moreover, ride-hailing services also provide the additional advantage and comfort of being a backseat rider. You can be productive during your ride, such as reading a book or getting work done. Moreover, in megacities such as Jakarta, commuters can be stuck in traffic jams for hours. As a backseat rider, you do not need to toil in the driver's seat during your commute.

Lastly, ride-hailing services help you save time. If you do not like queuing up for taxi rides or standing by the side of the road to flag down a cab, you will be glad to know that ride-hailing services minimises the waiting time. With ride-hailing, you will be picked up by your driver at the tap of a button.

5. Safer mode of transportation

Ride-hailing companies usually have safety features in case of an emergency. For example, Grab has a one-touch emergency button that connects riders to the national emergency response service. Additionally, Grab monitors and detects any unusual scenarios during your ride.

Lastly, they have a 24/7 safety centre for you to get emergency assistance, report any issues and share your trip with your loved ones.

Best credit cards for ride hailing services

A fan of ride-hailing services but wish for ways to save more on your rides? We've listed down four credit cards that will give you the best cashback or miles for frequent ride-hailing customers.

Future of ride-hailing in the Southeast Asian region

The future of ride-hailing is promising. With the growing demand for convenient travel, the services provided by ride-hailing companies are increasing in popularity. In fact, according to research by Blackbox, ride-hailing usage across Southeast Asia is predicted to expand threefold post-Covid-19 due to the shift in consumer attitudes and behaviours.

Undoubtedly, ride-hailing is here to stay and will continue to drive economies in Southeast Asia. If you are a frequent user of ride-hailing services, you should use credit cards to earn extra cashback and discounts on your rides!

This article was first published in ValueChampion.