Grab Taxi and Uber Taxi: Examples of IT and Logistics Integration

   Going places in a great metropolis such as Bangkok means having to cope with heavy traffic congestion as a result of a large number of motor vehicles on the road, be they private cars, motorcycles or passenger buses.  Worse still, today’s trend of Going Green and Healthy has proved to encourage bikers to be a part of road users. At any rate, there are alternatives such as the Bangkok Skytrain (BTS) and the underground train system (MRT) for those who wish to save time travelling, although neither has covered all popular destinations.  Thus, the remaining interesting alternatives for Bangkokians – a good example of effective application of IT to the logistics business – are the Uber Taxi and GrabTaxi.
     Uber Taxi with head office in San Francisco, California, provides taxi service in various global cities.    Founded in 2009, the company launched the service in San Francisco in 2010.  Originally, Uber offered only high-end luxury sedans known under Uber Black Taxi Service, its main service (following the private transportation service Black Car in New York City).  In 2012, Uber X service was launched as an extension of the former Uber Black, to include all qualified drivers with acceptable types of vehicles in the provision of its taxi service.
     GrabTaxi, on the other hand, is a smartphone-based taxi booking service provided the passenger and a smartphone-based taxi booking dispatching service to the driver.  Founded in 2011, the service was officially launched a year later in Malaysia with taxi network operating in Southeast Asia, namely Singapore, Thailand, Vietnam, Indonesia and the Philippines.  At present, a total of 75,000 cars have been registered in GrabTaxi network in Southeast Asian countries.  Its vision is to upgrade the taxi service provision, thereby making taxis a safer and more efficient means of transport everybody can be proud of.  Although founded later than Uber Taxi, it seems GrabTaxi is becoming popular in a wider circle than its predecessor.
     Both companies’ business concept seems to be not much different.  It is the concept of using IT to enhance their performance while trying to successfully satisfy customer needs in the age of customer-centric marketing.  Both want to create innovative services that change the old way of taxi hailing through the creation of a smartphone-based transport network app, thereby requiring the customer to declare his GPS position so as to let the driver know where he is.  The system is to locate the nearest unoccupied taxi and also arranges the pick-up queue.  At the same time, it lets the customer know who and where the designated driver is.  This proves to enhance the pick-up queuing, which provides not only great convenience for the customer but also service confirmation and certainty (as opposed to refused service by the taxi driver) as well as safety (given the GPS tracking device).     
     GrabTaxi charges 25 baht as extra booking service fee over the metered fare (starting at 35 baht and 5 baht/km just like the normal taxi fare while the fare during traffic jam and/or waiting at 1.50 baht/min).  The metered fare plus service charge can be paid in cash as well as by credit card.  In the case of Uber Taxi, the fare is not fixed.  The customer can check out in advance on the app as to how much the fare will be while payments will be automatically charged to the customer’s registered credit card. Uber’s fare starts at 45 baht and 9.20 baht/km, with a minimum charge of 75 baht/trip which reflects its provision of more value-added services, be they the vehicle type (a Honda Accord/Camry limousine), the fact that the driver addresses the passenger as Boss or Mister/Miss, or other supplementary services including extra cleanliness, drinking water and door opening for the passenger, among others.  For this reason, Uber charges 30 – 40% more than normal taxis.  In addition, the fare can be divided among passengers sharing the same ride.  At any rate, taxi fares in Thailand are still reasonable in comparison with those applying in other countries worldwide.
 
A whole host of definitions of ‘marketing’ have been given by authorities on marketing but Philip Kotler’s is simple.  According to him, marketing is “the science and art of exploring, creating and delivering value to satisfy the needs of a target market at a profit.”  To do this at a profit requires thorough understanding of what the customer truly needs and how the needs can be satisfied but not at a loss.  Business people must realize that customers always want quality goods and services at a low price.  Any venture to enhance or add value to services means an unavoidable cost increase for the business. Even though certain services are non-price activities (i.e. involving no direct price-based competition with the rivals), it should be kept in mind that non-price does not mean non-cost.  Most importantly, “value creation perceived by the customer must exceed the cost incurred if the value is to be sustainable”, which resembles the cases of GrabTaxi and Uber Taxi where IT is applied for use in business.
 
 
Compiled by BLOG.SCGLogistics
References: SCG Logistics Internal Communication :สยามรัฐต้นสัปดาห์ 40/2558 
thaiuber.com, forbes.com
 
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