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Pros and Cons of GRAB

 

 

Grab, as an e-hailing application, has indeed become a household name in Malaysia. Grab has been helping countless number of riders or passengers in the form of ferrying them from point A to point B safely and efficiently, not to mention at a very affordable price. Malaysians are happy to use Grab to commute to workplace on a daily basis; to go to supermarkets to buy groceries; to go to the hospitals or clinics; to visit some friends and other purposes.

 

At the same time, Grab has also helped Malaysians to earn extra income driving for Grab and some went to the extent of making Grab as their main source of income. This is in line with Grab’s philosophy of empowering micro entrepreneurs in Malaysia and also in Southeast Asia, as a whole. I , myself, has driven for Grab for a few months to earn extra pocket money as and when necessary.

 

Notwithstanding all the benefits offered by Grab to both riders and drivers, I am writing this to point out the often overlooked negative points or risks of Grab. From my personal experiences, driving for Grab as a part time gig has been somewhat helpful to say the least, in terms of giving me some extra pocket money to cover the fuel costs of commuting to work, the costs of occasional eating out, the costs of phone top-ups and Touch n Go top-ups. Things have been going smoothly for me until recently I have been diagnosed with tension headaches and muscle spasms. As far as I am concerned, there are two factors contributing to this illness - one is sitting still for long hours, another is staring at phone screen continuously. One of the reasons why I had to sit still for long hours and to stare at phone screen non-stop is the way Grab incentives are structured.

 

I believe there are Grab drivers out there who experience the same illness like me due to driving for Grab. I only drive for 4 hours per day on average, imagine the potential health risks for full-time drivers who have to drive 12-15 hours per day on average to earn a decent income?

 

I also want to take this opportunity to express my doubts on the very business model of Grab. Net profit from driving for Grab is calculated as the gross income/fare minus the Grab commission (25%), the fuel costs, the daily car instalment costs (costs of car instalment per month divided by 30 days), the daily car maintenance and depreciation costs (costs of car maintenance and depreciation per month divided by 30 days), plus meagre incentives rewarded by Grab. At the end of the day, what you get is tiny little profit which actually you have to save up for future repairs of your car - this is the hidden cost, the cost that not everyone knows unless you know a lot about cars. The impacts of putting a lot of mileage to your car everyday can be huge in the long run. As for the tiny little profit, of course drivers do not save this up for future repairs of their cars. They use it to cover the costs of their current living expenses and to save up for say, their children’s education fund. After 3 years of driving full-time, then only they will realise this hidden cost but at that time, it will be too late.

 

It is also worth mentioning the risks inherent in Grab application or e-hailing application in general. The riders and drivers alike risk getting robbed by strangers. Recent robbery-cum-murder case of a Grab driver has shocked many Malaysians and a lot of quarters have proposed the need to verify the identity of riders, which Grab bluntly rejected due to the potential risk of losing their non-Malaysian customers which I believe, are at least 50% of their customers’ base.

 

To conclude, I feel compelled to write this to point out the pros and cons of Grab as the top e-hailing application in Malaysia. I personally think that the very business model and philosophy behind Grab operations have to be revamped to be fair to both riders and drivers. Recent announcement by the Ministry of Transport to regulate e-hailing industry within a year from now could be the most practical solution but I hope that the three aforementioned negative points namely the health risks on drivers, no clear profit in the long run for drivers, and the safety risks on both riders and drivers will be further studied by Grab and the Ministry of Transport.

 

Farhan Kamal,

Researcher at Sunway University, PhD Candidate at University of Malaya.

Aspires to be an expert in mobility, sustainability and financial management.

 

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