Thursday, September 21, 2017

Disruption to the taxi business

Comfort Delgro is suffering a severe drop in business due to severe competition from Grab.

Grab is causing a big disruption to the market through its aggressive promotions. They are offering a discount of $4 or $5 for each ride.

Some passengers taking short rides virtually get the ride free or pays only $1 or less.

The generous promotion by Grab must be costing several tens or hundreds of million dollars. I beleive that this latest round of promotion was made possible by generous funding from Temasek Holdings.

I wonder if it was wise for Temasek Holdings to make this investment. Will they get back their return?




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