Grab Says It Would Not Get Drawn into a ‘Price War’ with Go-Jek

(Photo Credit: TODAY)

Bad news Grab riders. Grab will not be bringing back ride promotions and perks to compete with new ride-sharing service Go-Jek.

In an interview with TODAY, Grab’s Singapore head Lim Kell Jay talked about how Grab would not restart its ride promotions or perks. This is despite Go-Jek planning to make a full entrance into the Singapore ride-hailing market early next year.

Mr Lim said Grab is learning from its prior experience, realising that constantly giving out promotions is “unsustainable”, and that commuters are “going to be pissed” when the promos are stopped. He also added that, “it’s silly if we don’t learn from that”.

Mr Lim is speaking about a week after Indonesian ride-hailing firm Go-Jek launched its beta app here with promotions to woo riders.

Not Engaging in a Price War

While Grab will still use promotions to try and get riders to try its new services, Mr Lim said the company has “moved on” from ad hoc perks and discounts. Instead, Grab is trying to bring more long-term value to its customers. In addition, unlike its tussle with Uber in the past, the company will not be waging a price war with Go-Jek.

“The truth of the matter is promotions are very short-term,” said Mr Lim. “We need to take a much longer view. We are not here to fight that short war.”

Grab instead will focus on benefiting its users through GrabRewards and GrabClub, a recently launched monthly subscription scheme offering ride and food delivery discounts for a fee. Grab said such programmes will help their users save in the long-term.

Splitting of Market Share

Back in March this year, Grab got plenty of annoyances from commuters after it removed promotions following its takeover of Uber’s regional business. Both companies had previously offered promotions to riders in a long and difficult battle for market share.

In September, Singapore’s competition watchdog ruled that the Grab-Uber deal was ‘anti-competitive’ and laid out measures to lessen the blow on riders and drivers, as well as open up the market for new entries into the ride-hailing sector.

These measures, which include dismantling Grab’s exclusive arrangements with taxi operators, may be removed if a rival gets at least 30 per cent of the rides matched across ride-hailing services for six months.

While the solution for Grab would be to let Go-Jek gain a significant piece of the market share, Mr Lim said, “we do what the customers want… That’s something that we’ve learnt over the course of 2018.”

Mr Lim added that, “if we lose sight of that, then it really doesn’t matter (whether it is) 70 per cent, 80 per cent, (or) 30 per cent market share.”

What are your thoughts on Grab’s stubborn stance of not bringing back promo codes? Will you still continue using Grab, or have you switched over to Go-Jek? Let us know in the comments below.

Read more: Go-Jek Launches Beta App in Singapore Ahead of Official Launch Early 2019

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