Grab moved many of its transport drivers to GrabFood & other delivery verticals.

Grab moved many of its transport drivers to GrabFood & other delivery verticals. Source: AFP

‘Adaptability is key to survival’ – Grab Malaysia on business in a crisis

  • Grab Malaysia’s MD speaks to Tech Wire Asia on how the region’s biggest startup pivoted its businesses to its biggest crisis ever

The social isolation measures required to “flatten the curve” of COVID-19 infections meant that, for a period of months, certain industries could simply not operate when lockdowns came into place.

While many online services thrived thanks to the increased demand from stuck-at-home consumers, ride-haling services such as Singapore’s Grab was among the hardest hit.

Southeast Asia’s ride-hailing giant saw its driver-partners’ ride-based incomes shrink by double digits in Q2 of this year across all its active markets, when the impact of coronavirus was at its worst. At the time, Grab chief executive Anthony Tan said that the pandemic represented “the single biggest crisis to affect Grab in the eight years of our existence.”

Grab has been pursuing ‘super app’ ambitions for a number of years now. Since 2018, the region’s most valuable startup had been gradually expanding its suite of digital services, starting with GrabFood deliveries vertical and followed by its GrabPay e-payments ecosystem.

When its core ride-hailing business reeled in 2020, Grab quickly adapted by migrating nearly 150,000 transport driver-partners across markets to its deliveries business – allowing its badly-hit drivers to continue drawing an income, as restaurants and other services pivoted to home deliveries. Grab Malaysia managed to transition 18,000 GrabCar drivers to its GrabFood and GrabExpress (parcel and courier delivery services) operations within a single day, responding to the influx of demand.

Gig economy here to stay

“The impact of COVID-19 on livelihoods is real and many of our partners are still undergoing tremendous hardship,” Sean Goh, Managing Director of Grab Malaysia, told Tech Wire Asia.

“We are now adjusting to the importance and subsequently increased demand for delivery services – food, dry and fresh groceries, health and wellness products, etc – while mitigating the pandemic’s impact on our driver and merchant partners’ livelihoods where we can,” he added.

This mitigation was critical, as retrenchments and work furloughs across Southeast Asia’s battered economy saw an additional 115,000 people sign up to become Grab driver- or delivery-partners. Grab enabled flexible earning opportunities and gig work for this increase in partner personnel, allowing them to quickly switch between GrabFood and GrabExpress depending on the available jobs.

“COVID-19 has highlighted how gig work is critical and the gig economy model is here to stay. It will be part of the spectrum of work models companies and individuals can turn to and will be a key lever to ensure people can maintain their livelihoods, especially through challenging economic times ahead,” said Goh. “COVID-19 has shown us that we need to enable gig work that is fair, inclusive, sustainable.”

The company also rolled out its fresh produce and grocery delivery service GrabMart from a single pilot market in Malaysia, “to including Singapore, Indonesia, Vietnam, Thailand, Philippines, Myanmar, and Cambodia” within just three weeks.

“With movement restrictions implemented across the region, we have adapted our platform and pivoted our business to ensure we can sustain livelihoods and offer income opportunities to those who need it as the market continues to evolve,” commented Goh.

Having contributed US$5.8 billion (S$8 billion) to Southeast Asia’s economy between 2018 and 2019, Grab this year was committed to providing support for COVID-19 relief efforts in its active regions.

Besides committing over US$40 million to relief initiatives and launching nearly 100 initiatives around Southeast Asia to support its partners, medical frontliners, and impacted communities, the company also set up GrabMerchant as a quick way for SMEs to set up an online presence, and benefit from the 21% increase in online revenue that smaller merchants on Grab’s platform were experiencing.

With SMEs considered the backbone of the regional economy, employing around 90% of the Southeast Asian workforce, Grab Malaysia MD Goh believes that small businesses need to be adaptable to arising digital opportunities to remain relevant, post-pandemic.

“The crisis has also reminded us that businesses across all industries from corporations, SMEs, and micro-entrepreneurs need to be flexible and adaptable to remain resilient to weather through the challenges and changes that any crisis may bring,” he said. “In realizing this, we also wanted to encourage more micro-SMEs to embrace the digital economy and access to a wider customer base via our platform by leveraging on our network of riders and consumers.”