Grab braces for a ‘long winter’ as Covid-19 drags down revenues

Singapore tech giant Grab said its overall revenues have been dragged down by its core ride-hailing segment as the crisis brought by the novel coronavirus continues to force people to stay home.

Photo credit: Grab

Though its food delivery business has seen an uptick amid the pandemic, Grab’s total revenue was “lower than it used to be pre-Covid,” co-founder Hooi Ling Tan was quoted as saying in a Reuters report. The exec spoke today at a virtual briefing on the impact of Covid-19 in Asia hosted by the World Economic Forum.

The SoftBank-backed company is now planning for “a potentially long winter” as it looks to cut down its spending and become more efficient. She also advised other consumer-facing startups in the region to do the same.

Grab’s CEO and founder Anthony Tan last month said that Covid-19, “the single biggest crisis to affect Grab,” has hit the company’s ride-hailing business hard, with volumes in some markets down by double-digit percentages.

Tan also shared that the company was preparing to make “tough decisions and trade-offs” as it continues to gauge the pandemic’s overall impact on its business.

Grab has started offering its employees “flexible working arrangements” such as no-pay leaves, reduced working hours, and sabbaticals. Grab Singapore head of transport Andrew Chan has also warned that the company might no longer be able to provide drivers with extra financial support if the city-state extends the circuit breaker beyond June 1.

“There is a lot of uncertainty as to the depth and duration of the pandemic, and we don’t know how long the economic recession will last. We are taking active steps to conserve cash and manage our employee base,” a Grab spokesperson previously told Tech in Asia.

With strict travel restrictions still in place across the region, Grab is not the only mobility startup facing these problems.

Its regional rival Gojek has also seen a drop in activity in its motorcycle taxi service. Its GoRide service has been deactivated in compliance with social distancing measures in Indonesia.

Meanwhile, US-based Uber recently said it will be laying off about 3,700 of its staff as it sees lower trip volumes in its ride-hailing segment. Careem, Uber’s subsidiary in the Middle East, has also announced plans to cut its workforce by about 31%, affecting 536 employees.