SINGAPORE: For something that used to be available every week, promotional codes for discounted fares on bookings from ride-hailing giant Grab have slowed to a trickle lately for Ms Michelle Joseph.
The last promo code – an alphanumerical string that can be keyed into the app to redeem limited discounts – for a S$5 discount was more than a fortnight ago, according to the frequent Grab user. But it had limited appeal, given that it came with a condition.
“It could only be activated after a (full-fare) ride and usage is limited,” said Ms Joseph, who takes at least one ride via Grab per day and has reached the highest member status of Platinum.
“Now, it’s been more than two weeks and I haven’t received other promotions. It used to be weekly promos without fail,” she added.
In recent years, commuters in Singapore have enjoyed generous promotions as ride-hailing giants Uber and Grab tussled for market share. Promo codes, for instance, were regularly dangled to attract users.
But Grab’s announcement in March of a takeover of its American rival’s operations in Southeast Asia, which is still pending regulatory clearance in Singapore, has got industry observers and consumers wondering if the thrill of cheap rides may be hitting the brakes amid sharply reduced competition.
AdvertisementAdvertisementAlso feeling the absence of promo codes is Mr Dnez Lim.
Noting that they used to be a weekly affair, the 40-year-old said he received his last discount code on Mar 24.
While he had expected less frequent incentives now that Grab has emerged victorious from a bruising and expensive battle, Mr Lim said he could not help but feel “disappointed” given how "fares have become not as attractive as before".
For Ms Serene Goh, discount codes dished out by Grab also seemed to have become “less straightforward” these days, with requirements such as the mandatory use of the company’s e-payment platform GrabPay and being a member of a participating merchant.
“In the past, it was just key in the code and you’ll get the discount. Now, there’s so many things to fulfil,” said the 32-year-old.
With promo codes being the biggest incentive for her to use the ride-hailing app, Ms Goh said she has since gone back to taking more public transport and even taxis. “Without the promo code, the prices on Grab aren’t exactly the cheapest and sometimes, I'd rather make a flat-fare booking on ComfortDelGro.”
Some drivers on Grab have also noticed a drop in rides redeemed with promo codes.
One driver who wanted to be known as Mr Loo said that such rides used to be a daily occurrence. But when he spoke to Channel NewsAsia, the last discounted trip he had made was at least two days ago.
Another driver, who preferred to be anonymous, also witnessed a similar pattern.
“It’s only natural that Grab is doing this,” the driver said. “Without competition, it doesn’t make sense for them to continue giving out these discounts.”
However, he added the tapering-off in promo codes may have put off some commuters from using the ride-hailing platform. Coupled with the exodus of former Uber drivers to Grab, which has ramped up the supply of drivers, he has had to cover longer distances to achieve his targeted daily earnings.
DIFFERENT WAYS TO PROVIDE VALUE-ADD TO CUSTOMERS: GRAB
In a reply to a rider’s complaint about the recent reduction in promo codes, a customer service personnel from Grab wrote: “We do understand that the promo codes are fewer nowadays, but we would like (to) assure you that it will get rectified”.
The response, provided to Channel NewsAsia by a customer who requested to remain anonymous, continued: “We appreciate loyal passengers like you and we will be surely coming up with more customer loyalty programs.”
When contacted by Channel NewsAsia on whether it has rolled back the frequency of promo codes, a spokesperson would only say that the company provides an array of “value-add” promotions for its users.
She cited the GrabRewards loyalty programme, which allows users to redeem various rewards with points they earned from their rides and GrabPay in-store purchases, and an annual subscription programme launched in partnership with supermarket chain NTUC FairPrice that offers "consistent and attractive promotions to customers throughout the year".
“In addition to ride discounts, we find different ways to provide value-add to our customers,” said the spokesperson.
Industry observers noted that the use of discounts is among the common strategies used by businesses to drive short-term growth in market share. For the long run, however, it is not a sustainable move.
Nanyang Technological University’s (NTU) Associate Professor Momin Zafar Abdulmajid said it is only inevitable that Grab’s aggressive discounts and incentives to both riders and drivers will end alongside the costly ride-sharing war with Uber.
“The economics of the business just don’t allow it,” he said.
Agreeing, Associate Professor Nitin Pangarkar from the department of strategy and policy at the National University of Singapore (NUS) Business School said: “If something is too good to be true, it probably is and Grab riders are experiencing that now."
“After losing lots of money, made possible by venture capital funding, at some point (the promo codes) will stop."
However, both professors doubt that Grab will stop all promotions immediately given the impending competition. It will, instead, opt for “discounts of a different flavour”, such as tie-ups with other merchants.
This is because deals in partnership with other merchants “are more sustainable than pure discounts since the other merchant is going to pay part of it”, explained Assoc Prof Pangarkar.
Assoc Prof Momin reckoned that the doling out of discounts with the use of GrabPay also helps to grow the mobile wallet and fuel Grab’s foray into the financial services space.
This development of peripheral services and integration of various transportation modes into a single platform will help to set Grab apart from its rivals, he added.
But given that the discount-reliant market-grabbing strategy “does not guarantee long-term consumer loyalty”, Assoc Prof Momin said that Grab will need to exercise extra caution as it weans its customers off promotions.
Already, some commuters that Channel NewsAsia spoke to are keeping an eye on possible new entrants. Local carpooling app Ryde, for instance, will be rolling out its new RydeX service this week.
“I doubt I’d be as loyal after what has happened,” said Ms Joseph. “Bring on the competition.”
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