GRAB BIKE PRESENTATION VIDEO

Summary

This presentation delves into Grab's evolution from a Malaysian startup to a Southeast Asian giant, highlighting its diverse services such as GrabCar, GrabBike, and GrabFood. Founded in 2012, Grab's mission centers on creating economic opportunities while prioritizing sustainability, safety, and environmental impact. The discussion covers Grab's market dynamics, including supply-demand elasticity, tax impacts, and competition in an oligopolistic market. The company’s economic model is explored through its cost structure, externalities, and revenue generation. Ultimately, Grab’s success hinges on its innovative approach to addressing both consumer and driver needs while navigating complex market forces.

Takeaways

• 😀 Grab was founded in 2012 in Malaysia by Anthony T. and Hing with the mission to drive economic opportunities in Southeast Asia.
• 😀 Grab offers several services, including GrabCar, GrabBike, and GrabFood, aimed at enhancing mobility and convenience for users.
• 😀 Grab’s five main goals include creating sustainable impact, ensuring safety, targeting zero packaging waste by 2040, responding to COVID-19, and minimizing environmental impact.
• 😀 Grab focuses on improving the livelihoods of its riders by offering insurance protection, sustainable income, and flexibility.
• 😀 Grab aims to create safer experiences for all users, positioning itself as a secure platform in the ride-hailing space.
• 😀 Grab’s service allocation depends on the proximity between supply units (drivers) and demand units (passengers), with drivers closer to passengers being prioritized.
• 😀 The elasticity of supply is more inelastic in the short run, meaning that sudden fare increases do not immediately attract more riders, but the market adjusts in the long run.
• 😀 Elasticity of demand is influenced by the availability of substitutes; customers are more likely to switch services when alternatives are available and prices increase.
• 😀 Taxes on ride-hailing services can increase the price for consumers, reducing demand, especially in elastic markets where substitutes exist.
• 😀 Grab operates in an oligopoly, holding over 50% market share in the Southeast Asian ride-hailing market, with competition from firms like Gojek.
• 😀 Grab's business model includes explicit costs (e.g., travel payments, advertising), implicit costs (e.g., investing in technologies), and sunk costs (e.g., research and development).
• 😀 Positive externalities of Grab include user convenience and income opportunities for drivers, while negative externalities include increased traffic and pollution from additional vehicles on the road.

Q & A

What is the mission of Grab and when was it founded?

Grab was founded in 2012 in Malaysia by Anthony T and Hing. Its mission is to drive Southeast Asia forward by creating economic opportunities for everyone.

What are the main services provided by Grab?

Grab offers several services including GrabCar, GrabBike, GrabFood, and more, catering to different transportation and delivery needs.

What are the five main goals of Grab?

The five main goals of Grab are: 1) Creating sustainable impact by improving livelihoods for riders, 2) Ensuring safety for everyone, 3) Targeting zero packaging waste by 2040, 4) Contributing to COVID-19 recovery in Southeast Asia, and 5) Minimizing environmental impact.

How does Grab manage the supply and demand for its services?

Grab uses a system where supply units (drivers) and demand units (passengers) are distributed based on proximity. The supply is inversely proportional to the distance from the demand, meaning closer drivers are more likely to be assigned to passengers.

What is the difference between short-run and long-run elasticity in Grab's services?

In the short run, the elasticity of supply is relatively inelastic because a sudden fare increase doesn't immediately attract more riders due to barriers like application processes. In the long run, supply is more elastic as higher incentives may bring in more drivers.

How does the price increase affect the demand for Grab's services?

The demand for Grab's services can be elastic or inelastic. When prices rise, customers may switch to alternative services if they are available. For elastic demand, a price increase significantly reduces demand, while inelastic demand shows little change in customer behavior.

What is the impact of taxes on Grab's demand?

Taxes on Grab's services lead to higher prices, which typically reduces demand, especially when the demand is elastic. Consumers may shift to alternatives such as public transport or other ride-hailing services if they are more affordable.

What are the different types of costs involved in Grab's operations?

Grab incurs three types of costs: 1) Explicit costs (actual payments like technology and marketing expenses), 2) Implicit costs (resource use like investments in technology), and 3) Sunk costs (non-recoverable costs such as R&D and development costs).

What are positive and negative externalities associated with Grab?

Positive externalities include providing income opportunities for drivers and increasing convenience for passengers. Negative externalities involve issues like increased traffic congestion and environmental pollution due to more vehicles on the road.

How does Grab contribute to market efficiency?

Grab enhances market efficiency by improving access to transportation, increasing competition in the ride-hailing sector, and reducing inefficiencies associated with traditional transportation methods. However, it also creates competition with traditional taxis, which can negatively affect their income.