How subscriptions could help Grab win Southeast Asia

We saw how ride-hailing turned into a commodity when Grab was still competing with Uber in Southeast Asia. Back then, if you wanted a ride, you pulled out your phone and loaded up the apps. You compared the fares, then picked the cheaper one.

That direct price war took a toll on the companies as they burned cash to subsidize the true cost of the trips (Uber eventually pulled the plug on its local business to cut losses).

But more than that, it didn’t inspire customer loyalty.

With Go-Jek’s entry in the region, Grab tries a different tactic: it’s doubled down on its loyalty programs to get more bang for its buck.

The company now offers Amazon Prime-style subscription plans, beating its Indonesian rival to the punch.

Here’s why subscriptions make a lot of sense:

1. They lock in customers.

Piloted in Singapore, Grab subscription plans are as follows:

• All-access pass (basic and premium): to get GrabFood and Grab rides discounts
• Short commute pass (basic and extra): to get S$10 off on a certain number of rides
• GrabFood pass: to get food discounts and free delivery

Here’s how they’re different from the points scheme GrabRewards:

Subscriptions	GrabRewards
Connect Grab’s services (i.e. Rides, GrabFood, and GrabPay) into an ecosystem
Offer discounts

“Shotgun” approach

Go-Jek plays catch-up outside Indonesia