Grab is currently in a new phase of adjustment as the Southeast Asian e-hailing and delivery company faces regulatory changes in Indonesia, while also recording better-than-expected financial performance and expanding its Malaysia-Singapore cross-border services.
In Indonesia, Grab plans to restructure its business model after the country's government set a maximum e-hailing commission cap of 8%, compared to around 20% previously.
The surprise decision was announced by President Prabowo Subianto, with a particular focus on two-wheelers. According to Grab CFO Peter Oey, the fare structure and two-wheeler business model in Indonesia need to be recalibrated, but the company believes it still has some room to absorb the impact of the changes.
Although Indonesia is the largest ride-hailing market in Southeast Asia, Grab management expects the impact on the company's overall mobility operations to be limited as Indonesian two-wheelers contribute less than 6% to Grab's mobility business volume.
However, Grab still described the change as not minor and is seeking further clarity from the relevant ministries on the implementation of the decree.
Grab Revenue Up 24%
From a financial perspective, Grab still showed resilience as its first-quarter adjusted EBITDA rose to US$154 million, surpassing market expectations of US$146.3 million.
The company's revenue also increased 24% year-on-year to US$955 million, supported by continued strong demand for ride-hailing and delivery services, although the expansion rate was no longer as fast as the previous aggressive growth phase.
At the same time, Grab also recorded new developments in Malaysia and Singapore after obtaining its first Cross-Border E-Hailing Service Operator License.
This license allows Grab to offer international travel bookings directly through its app, starting with the Cross-Border JB-SG (Beta) pilot project from Singapore to selected areas in Malaysia including Johor Bahru, Iskandar Puteri, Forest City, Kulai and Senai.
