The ASEAN Taxi Market is anticipated to register a CAGR of about 18.7% during the forecast period (2020 – 2025).
- Consumers are unwilling to invest hugely in commodities which are used for only a brief period. As a result the Taxi services industry on the rise. Booking Taxis require no maintenance and are widely available at affordable prices. Lack of parking spaces in crowded cities and other forms of traffic congestion is driving the growth in the ASEAN region.
- Various factors, including population rise along with growth in the economy, are making the ASEAN counties the fastest and also an attractive economic market to the investors. The ASEAN region includes already developed countries like Singapore, Thailand, Malaysia, Indonesia, while also developing countries with low per capita revenue like Vietnam and the Philippines, which are also to see a massive Taxi demand.
- Rise of electric cars providing the same utility as any taxi with an added benefit of reduced ill-effects on the environment is also becoming popular amongst the developing ASEAN countries. Many young engineers and entrepreneurs with experience in design and innovation see the E-Taxis industry as a massive opportunity, especially in the ASEAN markets.
Key Market Trends
Technological Advancements and Traffic Congestion are Driving the Growth
ASEAN cities have jam-packed roads. With the increasing number of vehicles, the existing infrastructure is unable to meet parking for every lane. Traffic congestion mentally fatigues the individual and affects the productivity person. As a result of the ASEAN, travelers are booking taxis for daily needs.
Recent growth for taxi players such as Grab and Gojek in significantly larger cities is becoming popular. With 24/7 service, timed pick-ups and drops to designated locations and free 4G internet for the customer along with added comfort is all driving the growth of the market
Today, Taxi services are offering online systems, including mobile applications, to gain consumers. 73.3% of adults in the ASEAN region have access to the internet through their mobile phones, which is also one of the highest amongst compare to other regions. As mobile phone use has risen, the usage of smartphones for the purposes of convenient taxi booking has also increased.
Indonesia is the Largest Taxi Market
The Singaporean government has also granted an exemption of registration fees for battery-operated/electric vehicles and even an exemption to permits to E-Vehicles running on ethanol and methanol fuels. Today, Grab is the largest electric and hybrid vehicle fleet operator in Southeast Asia. Taxi companies like Grab are also pushing to move from gas to complete E-vehicles. Grab, which has today become the major service for connected users through its app by smartphones, is all set to introduce 200 BYD e6 taxis by 2025.
Similarly, HDT has plans to expand its all-electric fleet to at least 800 vehicles over the coming years. With such a wide range of options and growing government incentives towards E-vehicles, ASEAN countries will see a greater demand for EV Taxis.
While, Indonesian government plans to collaborate with the manufacturers to increase the electric vehicle fleet size in the country. In March 2018, the Indonesian government partnered with Honda to help the country reduce exhaust emissions and develop a greener environment. However, the high cost of the battery and thus of E-vehicles is the key factor hindering the growth of the market.
In Singapore, new concepts such as Zero-Commission ride-hailing service is being offered by TADA. They promise stable fares throughout the day as they do not collect a commission from the drivers earning. As a result, drivers earn more, so they also don’t always look for picking customers with the highest fares. Howver, markets such as TADA is not expanding as fast as other competitors such as GRAB and GOJEk since they do not have a big marketing budget to squander due to the zero-commission model.
The ASEAN Taxi Market is hugely fragmented with various startups and regional players such as Grab, Gojek, TADA, and RYDE. Although to have the edge over its competitors, the major taxi companies are making joint-ventures, partnerships to launch newer products.
For instance, GRAB has merged with Uber previously in ASEAN markets. Today it is the biggest app in Singapore. GRAB’s main rival in SG which Launched in SG in last year has already established a huge market in Indonesia and will not enter the Singapore market
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