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How Grab works: The on-demand business model !

Grab ride-sharing is a renowned on-demand business model that leads Southeast Asia’s mobility platform. Grab in Asia actively offers food delivery services, ride-sharing services, and ride-booking services for taxis, bikes, carpooling, shuttle services via a single super-app. 

To get a clear idea about the business model, let us discuss its various aspects in detail. 

Grab Business Model Canvas Explained

Grab  follows a light asset business model that enables customers to book a ride with the people willing to offer their ride services. Once the ride is completed, Grab takes a pre-decided cut from the fare. 

Grab Asia is one of the leading on-demand apps from where you can hire anything on wheels. More than 6 million rides are being carried out daily, and around 2.8 million drivers are associated with the brand. The company earns revenue comes from multiple services like hotel booking service, food ordering platform, grocery shopping, trip planning, and many more. 

Key Segments in Grab Ride Sharing Model

Here is the list of core partners, that works together.

  1. Drivers- Pillar for supply-side
  2. Customers- Pillar for demand-side
  3. Investors- Pillar for investment 

Grab Taxi Business and Revenue Model 

Grab Asia follows the revenue model to take a commission out from the rider’s fare. Here is a detailed process to explain how Grab Taxi Business models generate revenue. 

Segment: Customers

As an integral part of the on-demand taxi business, Grab revenue is much dependent upon the riders. Riders get an instant pick up within a few minutes after they successfully book a ride via an app.

While initiating the booking process, a rider can check for the fixed fare. It helps in adding transparency to the riders about fares. As soon as the ride is completed, a rider has the full freedom to leave feedback. 

Segment: Drivers

On- board drivers can earn a decent amount by getting on-board. The flexible working hours and easy accessibility to passengers’ search make it convenient for them to monetize their assets and time. This easy-to-work business model explains why Grab Asia can grow with around 3.5 Million drivers until now. 

There are three major categories for drivers: 

1. Silver: A driver needs to complete 60 rides per month, and he becomes eligible for coupons for car maintenance services.

2. Gold: A driver needs to complete 150 rides per month, and he becomes eligible for lifestyle coupons and vouchers.

3. Platinum: A driver needs to complete 300 rides per month, and he becomes eligible for medical health benefits. 

Grab Revenue Insights- How does it make money?

Grab Asia works on the commission model. It takes around 16% to 25% of commission as their service charges. An average cut of 25% per ride makes it convenient for the company to earn approximately 4 million revenue per year with every ride confirmation. 

The company refrains itself from offering any discounts or free coupons for rides, making it earn a minimum of $418 commission from each driver. There is a referral bonus scheme ($24 per referral) that encourages drivers to build a network. 

Why is Grab so successful?

Have you ever wondered what makes the company to conquer Southeast Asia in such a short period? The wise three vital elements on which Grab ride-sharing platform focus make it understood why it is in high demand. 

  1. Successfully meeting the local requirements
  2. Taking an active part in resolving the transport issues at the local level
  3. Easy access to the hyperlocal businesses 

And rest is history for the company.  

The future is all about the on-demand business model

Touted as a super app model, Grab Asia is a front-line player in the consumer demand market. In the coming times, the on-demand taxi business model is ready to conquer the hyperlocal marketplace industry. 

The battle for supremacy for Super app is on, and the on-demand ride sharing platform is all set to fix a consumer industry’s fixed position. The one-stop platform has already been tough competition in SEA and is on its way to enter the global market.

Launch your Grab Clone App Now!

Do you have a plan to start your on-demand business model with a super-app? Connect with Team Jugnoo to launch your Grab Clone. 

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