GrabTaxi app raises $90M fund

DAVAO CITY, Philippines – Malaysia-based taxi booking app GrabTaxi announced that it has raised a $90 million fund to finance its talent acquisition and driver loyalty program efforts.

GrabTaxi does not have its own taxi fleets, thus its reliance on drivers renting from taxi companies to use their app.

“We want to make our drivers happy. Happy drivers make happy passengers,” Paolo Evalle, GrabTaxi driver experience head said during the app’s Davao City launch on Wednesday, October 22.

Leading its third round of funding is US-based investment firm Tiger Global, with Hillhouse Capital Management joining current investors GGV, Qunar, and Vertex Ventures.

Tiger Global also has investments in Flipkart, an Indian online retailer; Netflix streaming service; and Quora, a community-based Q&A site.   

“We now have the firepower to compete with our competitors,” said Natasha Dawn Bautista, GrabTaxi marketing vice president.

GrabTaxi’s “to do” list, given its latest fund infusion, include hiring and retaining the right people, particularly  tech whizzes who ensure that GrabTaxi app is running efficiently; improving their “champion driver’s” program; and helping refurbished old cars.

A competitor to EasyTaxi and Uber taxi booking apps, GrabTaxi currently has 400,000 active monthly users and makes two bookings every second.

Calling themselves the “David” of the competition, Bautista said the firm, which started in 2011 as a for profit social start-up, is sticking to its Southeast Asia expansion, eyeing one to two countries to add to its current 6 markets – Malaysia, Thailand, Singapore, Vietnam, Indonesia, and the Philippines.

“We’re very proud that we’re a Southeast Asian company. We’re local. We have become expert in the Southeast Asian market. We don’t want to lose our focus on this market,” Bautista stressed.

Davao City is the 17^th location in Southeast Asia to use the app. Davao City is the third city in the country to experience GrabTaxi’s selling proposition of convenient, easy, and safe taxi experience for passengers enduring inefficient transport franchises and price-gouging drivers.

The app launched in Cebu in July, following its August 2013 launch in Metro Manila.

In May this year, GrabTaxi launched GrabCar in Manila to compete with Uber that has a dedicated fleet of limousine drivers.

Davao City has been chosen for its increasing number of smartphone users with data connection, stable taxi franchises (currently GrabTaxi Davao has 11 fleet), and to “help Davao promote itself as a tourist destination.”

Driver’s welfare

Evalle said GrabTaxi aims to improve the people management (of operators to their drivers), increase operators and drivers income, and improve the branding of fleet operators.

John Henry Eugenio, a taxi driver in Davao City for 12 years now, said that since he used GrabTaxi, he saw an improvement in his daily income, booking 4 to 5 passengers from the busy hours of the morning until early rush hours in the afternoon.

“Before, we kept driving from Claveria to JP Laurel to pick up passengers. It was a waste of time and gasoline,” Eugenio said in Filipino.

 JP Laurel is where the Ateneo De Davao University, University of Mindanao, Artiaga Street Shop, SM Lanang Premier, the Marco Polo Hotel are within reach.

Within a 3-kilometer radius, a GrabTaxi driver would bid if they can give you a ride. It’s not a first come, first serve basis though – whoever is the nearest driver is the one to pick you within a minute and drop you off at your destination.

To date, more than 300 drivers and passengers have used the app in Davao.

Unlike in Manila where the booking fee is P70 ($1.56*) on top of the P40 ($0.89) flag down taxi rate, Bautista said that they are considering a P20 ($0.45) to P30 ($0.67) booking rate in Davao City.

But until December 31,  Davaoeños can enjoy a zero booking charge, Bautista said. The same goes for Cebu.

“We want the drivers to come to you and not you running after them to get a ride,” Bautista said.

On top of improved passenger ridership, Eugenio said his income is seeing an increase of 30%.

Bautista said the drivers can experience a 30% to 300% income increase or from P600 ($13.39) to P2,000 ($44.66) to P3,000 ($66.99) a day. This also translates to improved boundary or daily rental fee for taxi operators.

Evalle said that GrabTaxi is looking primarily after the welfare of the taxi drivers. To enable them, GrabTaxi is microfinancing an affordable smartphone unit to be used by the drivers to help them locate passengers via FourSquare, GoogleMaps, or Waze.

Eugenio said the Cloudfone he is using is worth P10,000 ($223.19), which he is paying for P50 ($1.16) a day for 200 days.

He explained in Filipino: “But there are some drivers though who couldn’t pay for their smartphones regularly because they get “short ( earn less than the boundary) and they won’t be able to drive the next day or days.”

“GrabTaxi though won’t penalize them for late payment (for the smartphones),” he said.

Only the top 2% of the drivers are being rewarded at the moment – monetary reward if they booked 5 more passengers in a day, grocery bags, or a family trip to an amusement park, Evalle said. Health medical organization (HMO) benefits are also eyed to be provided to the top performing drivers.      

“Operators can now track who among their drivers are the best and the worst. Davao drivers are very obedient; they abide by the rules. They’re very productive,” Evalle said.

Currently, there are 6,000 plus taxi units in Davao City, with the likes of All Aboard, Holiday, and Maligaya, leading the fleet. The Metro Taxi Drivers Association are supporting their drivers to use GrabTaxi while other fleets are availing of the app to augment their communication needs, like lack of radio for the operator to deploy drivers.

Eugenio said only 8 out of 50 drivers of All Aboard are using GrabTaxi at the moment, since the fleet has no radio deployed to drivers. “Since I attended two GrabTaxi meetings, I teach some of the drivers also how to use the app,” he added.

Improving the system

Asked if they are going to enable credit card payment for GrabTaxi, Bautista said they are looking into it, among other payment options, but the market is transacting mostly on cash basis.

With regard to erring drivers, Bautista said drivers will not only be sanctioned but “bad” passengers as well.

Erring drivers will be suspended or stricken out of the system after 3 violations, while passengers displaying bad behavior are also deleted from the system.

“We’re also looking after the driver’s welfare. It’s not always the driver’s fault because there are also some passengers who are at fault,” Bautista said. Loyal “grabbers” or passengers also get reward from GrabTaxi, Bautista added.

GrabTaxi is also eyeing a GrabCar launch in Cebu and Davao next year, as the app is still fine tuning details.

Eugenio said to make sure he stays data connected, he loads, out of his own pocket, P20 ($0.45) to P30 ($0.67) daily or twice of that amount on a given day.

Since GrabTaxi has partnered with Globe Telecoms, Eugenio can call the passengers using Globe or TM if in case he could not find them by using the navigation apps or the directions he was given.

“Some passengers don’t give their exact location, they don’t add landmarks. If we’re taking longer to find them, they’d be impatient and we lose them. It would help if they be more specific to say where they are so we can pick them up faster,” Eugenio said.   

GrabTaxi officials said they are working on a free call system between drivers and passengers regardless of networks.

“I’m happy with GrabTaxi. I hope more Davaoeños will use it,” Eugenio said. – Rappler.com