After Uber deal, it’s clear: platforms like Grab are changing how we do business

Photo credit: Grab

Lawrence is a TIA Star Contributor and publishes exclusive, high-value content that serves the Asian tech community. Read more from TIA Star Contributors here.

For Southeast Asia, Grab’s acquisition of Uber’s operations marks a watershed moment in the development of digital business models and the changing commerce landscape. It signifies the speed, scope, and scale of platform businesses’ disruptive prowess and how the internet’s commercial impact is extending from ecommerce into physical realms.

In six short years, Grab has grown to become a dominant player in the region. Today, it serves 168 cities across eight countries, with multi-modal transportation services cutting across private hires/taxi-hailing, coach, shuttle, carpooling, bike-sharing, and business commute. Beyond transportation, rapid product innovations like mobile payment, micro-lending, and credit services are extending Grab’s ecosystem. The company is quickly evolving into a digital lifestyle app providing multiple daily necessity services.

What does this mean?

Grab’s success is a testimonial to the changing nature of commerce. Platforms enable exchange of products and services between individuals, bypassing traditional, less efficient middlemen. The proliferation of cloud, mobile, social, and big data analytics is enabling individuals to exchange information and ideas in real time—what they need, where and when these are needed, and who are best to supply these needs. Platform businesses leverage pervasive connectivity and real-time demand/supply intelligence to match-make and coordinate the exchange of these services.

Compared to traditional business models, platforms are more “efficiency intermediaries.” For example, real-time information allows platforms to respond to demand-supply mechanics with dynamic pricing. Such self-regulating mechanisms influence consumer and driver behaviors by fluctuating prices, which reflect local demand-supply gaps, to encourage supply increase or reduce consumer demand.

Today, platform services permeate our lives, cutting across food, grocery, last-mile delivery, beauty services, job search, financial services, and even healthcare. Yet they operate on a common platform-based principle—to simultaneously coordinate demand and supply amongst hundreds of thousands of individuals and small businesses—each acting in accordance to their self-interest, but in aggregation, forms a collective ecosystem.

The changing nature of commerce

We are only seeing the tip of the iceberg in the changing nature of commerce. Technologies are available today, bringing us toward outcome-based commerce where product, services, and pricing can be individually adapted in accordance to a customer’s desired outcomes. It is not far-fetch to imagine a near future where ride-sharing platforms can allow consumers to offer premium fares to attract the nearest available drivers or vice versa.

Businesses competing in this future will be founded upon digital platforms that drive real-time information across its value chain and offer information-rich digital products and services.

Here are a few key questions business and technology leaders need to ask themselves as they look to technologies to enable platform-based business models:

1. How can information add foresight so we can sense and subsequently predict changes in demand and supply? For example, if rainy weather is the common cause for a surge in demand for taxis, how can third-party weather data help predict where and when rain is likely to occur?
2. How do we ensure such intelligence is shared, accessible, and triggered to those who need it, when they need it so they can act to influence the outcome they desire? With predicted rain locations, how can a firm preemptively influence and direct drivers to these locations?
3. How can we leverage platform-based capabilities (e.g. crowdsourcing and open innovation) to increase speed of innovation and deliver outcome-based products and services which are relevant to our ecosystem members?

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Increasingly, businesses will have to rephrase the questions they ask themselves as the pace and scope of disruption accelerates. Grab’s growth in the last six years has completely changed the transportation landscape in Singapore, and more can be expected as it continues its journey into a digital lifestyle platform.

For others, it brings foretelling signs of increasing disruption, yet also offers inspiration and ideas about how to achieve the same speed and scale in innovation. In many ways, the changing nature of commerce is here. The question is how do you respond?