Since Uber’s exit from Southeast Asia, many smaller ride-hailing startups have started mushrooming to capture a piece of the market largely dominated by Grab.
The latest to join fray is homegrown Malaysian brand diffride which aims to “keep prices affordable,” it said in an announcement on Tuesday.
diffride CEO Hannah Yong said, “our mission is to provide a fair and innovative e-hailing service to the people.”
diffride claims to be the first ride-hailing service provider to fully comply with Malaysia’s Ministry of Transport’s regulations, where its drivers will have to undergo screening by the ministry’s agency Land Public Transport Agency (SPAD).
The startup plans to tie up with shopping malls, hotels and other destinations to offer “joint value-added deals. “In time, we hope to be able to expand diffride’s services to the entire country, and maybe beyond,” she added.
The rise of smaller ride-hailing players
Shortly after the regional exit by Uber, Indonesia-based Go-Jek had announced its first international expansion into four new markets in the region. However, Malaysia is not on the list.
The lack of competition may be pushing smaller local ride-hailing companies to cash in on the opportunity to snag market shares from Grab. In Malaysia, besides diffride, existing ride-hailing players include MyCar and Dacsee, both of which launched in April.
According to Dacsee’s website, the blockchain-based startup has recently raised $31 million from an initial coin offering (ICO) that ran from end of May to late-July. The funds raised will be used to finance the blockchain-based startup’s long-term marketing, expansion and outreach efforts.
Based on Dacsee’s white paper for its ICO, it is also available in Thailand and is eyeing other underserved markets including Indonesia and India. It claimed to set itself apart from other ride-hailing firms with the removal of service fees of up to 30 per cent, and will consolidate and redistribute the fees based on various criteria.
Mycar meanwhile had kicked off its operations with a fleet of nearly 60,000 drivers, according to a report by The Star. It is unsure how these smaller companies have been performing so far, but one thing is for certain, Grab is not alone.
“I think it’s going to be an uphill battle for anyone joining the race. The business works only when you achieve economies of scale. That being said, new startups tend to bring new innovation and approaches, and I’m sure dominant players like Grab will be watching closely as well,” 500 Startups managing partner Khailee Ng told DEALSTREETASIA. The early-stage VC firm is an early investor in Grab.
Founded six year ago, Grab has grown to be one of the first unicorn startups in Southeast Asia, and is often referred as a success story among startups in the region. However, despite all the startup glory, its long-term profitability goal is still unanswered, as with other ride-hailing majors Go-Jek and Uber.
While still focusing on its ride-hailing business, Grab and Go-Jek have both shifted their battle to on-demand services, dabbling into food and grocery delivery as well as payment services. In its latest $2 billion funding round, Grab emphasized that it will double down in Indonesia, tapping on the booming internet population in the market while Go-Jek is also said to be raising a $1.5 billion round to fund its battle with Grab.