SINGAPORE taxis will likely be spared another brutal war with ride-hailing firms, as Grab and Go-Jek make a play for bigger markets, Maybank Kim Eng analyst Luis Hilado has said.
“We believe the two ride-hailing unicorns are evolving their business models - and thus aggression - beyond the public transport space and into larger-population markets such as Thailand, Indonesia and Philippines,” Mr Hilado wrote in a recent report.
“For example, within a month of its commercial launch in January 2019, Go Jek has reduced its driver incentives and emphasised growth in other services.”
He added that it seems unlikely for Singapore taxi giant ComfortDelGro to see “the same intensity of competition as during the height of attrition during the three-way fight between the taxi industry, Grab and Uber” in 2016 and 2017, especially in the wake of industry “right-sizing” - a shrinking taxi fleet and a decline in taxi drivers’ licences since that period.
The reduced fleet size, Uber’s exit from the market in 2018 “and Go Jek’s mild entry this year have provided relief and a degree of stability” for ComfortDelGro’s cabs, he added.
Still, “the latest entry of unlisted Go-Jek is likely to have some ripple impact on Grab and ComfortDelGro” in Singapore, Mr Hilado warned. “Even without escalation, we think the perception of increased competition could dampen sentiment on the (ComfortDelGro) stock.”