Comfort Delgro's profit dropped by $53 million, mainly due to the weak taxi business.
The faced strong competition from Grab and Uber. This challenge is faced by traditional taxi operators. How can they meet the challenges?
My view - they should adopt a strategy that focus on their strengths, rather than compete with Grab and Uber on their strengths.
Comfort Taxi's strengths are:
a) A large base of taxi drivers.
b) Their taxi drivers are more experienced
c) Commuters are used to metered fares.
Grab / Uber's strengths are:
a) Dynamic pricing
b) Discounts to reduce fares (but this cannot be sustained in the long run).
c) Convenience of booking through the app.
I will write more about how a traditional taxi company can respond to the challenge from the new platforms.