Hi there, it’s Robin.
Singapore’s sharing economy is now undergoing massive changes – both in last-mile mobility and ride-hailing.
Singapore’s last-mile mobility landscape is getting more regulated and operational costs are rising. It looks like only the bigger players will be able to prevail and the market is set to mature.
Changes to the last-mile mobility space in Singapore
- Ailing Chinese bike-sharing firm Ofo might have its license suspended if it still fails to comply with regulatory requirements by Feb 13.
- Electric scooter operators like Neuron Mobility and Lime amongst others are in the midst of applying for the relevant licenses and will have a cap on their fleet sizes.
As for ride-hailing, the battle among the big regional players – Grab, and Go-Jek – in Singapore is quickly evolving from luring consumers with cheap rides and drivers with revenue boost to competing on service quality instead. Will consumers be willing to pay for ‘better services’?
End of a price war in Singapore’s ride-hailing market
- Indonesia’s on-demand giant Go-Jek began rolling back on its points-based incentive scheme here in Singapore alongside fresh funding as it seeks to pivot away from the cash-burning price war strategy.
- Archrival Grab is also determined not to engage in price slashing to win market share.
Chalking up burn rates to establish one’s presence is no longer going to work in Singapore – both for last-mile mobility startups and on-demand giants. New strategies have to be considered in order to thrive in Singapore’s future sharing economy.
One way forward could be building an ecosystem, offering a plethora of add-on services, to keep users active. Both Grab and Go-Jek are already doing that, providing food delivery, payments services, and other services on their apps. While still costly, it entails a more long-term approach to create better value for their users as opposed to just a cheaper alternative.
This trend is similar to the one in China, as identified by a recent Chinese commercial sector report. Chinese companies are increasingly geared towards competing on service quality than on price alone.
Another country to watch in Southeast Asia is Indonesia – the world’s largest archipelago, also the home of large tech firms like Tokopedia and Go-Jek.
Much has been said about Indonesia’s upcoming elections. Usually, in the lead up to a potential major regime change, investment decisions are put on hold, which could affect the tech community in Indonesia.
Most experts, however, believe that regardless of the outcome, local and foreign investments, especially in the tech sector will continue to be stable in 2019.
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