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Why Fintech May Be the Future of Ridehailing for Grab, Uber

By
Jen Wieczner
Jen Wieczner
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By
Jen Wieczner
Jen Wieczner
Down Arrow Button Icon
July 16, 2018, 7:48 PM ET

In March, Uber merged with Grab, allowing the Southeast Asian ride-hailing rival to take over its business in that region. Now, Grab is offering financial products that Uber never did.

“We’ve been able to focus a lot more on serving Uber’s customers beyond transportation,” Hooi Ling Tan, Grab’s cofounder, said at Fortune’s Brainstorm Tech conference in Aspen, Colo., on Monday. One example: Payments and financial services, a business Tan expects “to be 20 times the size of transportation” revenue.

Grab, a Singapore-based company whose app allows customers to order taxis, cars, and even motor bikes on-demand, has recently expanded into mobile payments. GrabPay—once just a way for passengers to pay their driver digitally with their phones—debuted in November to other merchants and small businesses that can now use the product to accept mobile payments.

Unlike Uber (which maintains a 27.5% stake in its Southeast Asian counterpart), Grab accepts ride payments in cash, but it is trying to encourage customers to move away from that.

“We realized that the cash-based economy, albeit something that we’ve been able to work well with, isn’t the most efficient,” Tan added. “We need to help solve that because there weren’t other players who were doing it as scale.”

Last month, car manufacturing giant Toyota invested $1 billion in Grab, valuing the taxi-hailing company at more than $10 billion—cementing its status as the leader in its industry in Southeast Asia. That follows investments the previous year by Softbank and Didi Chuxing in Grab.

Of course, Grab’s plans to grow its business far beyond the roads, into a potentially much larger opportunity in fintech, likely helped boost its valuation. Tan envisions Grab becoming an everyday necessity for its customers. “We want Grab to be the thing that you just need to take out from home without having to worry about your wallet,” she said.

Will Uber follow Grab’s lead into finance? CEO Dara Khosrowshahi didn’t hint at any such plans during his own Brainstorm Tech interview.

About the Author
By Jen Wieczner
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