Growth in food delivery business not enough to cover transport decline amid COVID-19 outbreak, says Grab Singapore head

Growth in food delivery business not enough to cover transport decline amid COVID-19 outbreak, says Grab Singapore head

Grab Food, grab, delivery driver - file photo
File photo of a Grab Food delivery driver (Photo: Jeremy Long)

SINGAPORE: Singapore-based Grab's food delivery business has seen a 60 per cent increase in orders since October and November last year, fuelled in part by the COVID-19 outbreak, which has led to more people working from home and opting for food deliveries.

But this increase has not been enough to cover for the losses suffered by the transport side of their business due to the ongoing pandemic, Grab Singapore's managing director Yee Wee Tang told CNA on Wednesday (Jun 10).

In addition to its food delivery service GrabFood, Grab offers ride-hailing and taxi booking services - both of which have been badly hit by the pandemic, with some drivers reporting their incomes dropping by more than 70 per cent in recent months. 

READ: Grab launches new career portal, training programmes to support drivers

“Unfortunately our transport business is bigger than our food business,” he said. 

"So while our food business has increased, the drop in transport business is more significant.

“When you look at driver income, while it has helped that the drivers have also some other jobs in terms of food delivery, it doesn't cover the drop in transport (business).”

Mr Yee said that while online deliveries will continue to boom over the next few months or longer, Grab's transport business is unlikely to reach the same levels as before the outbreak "anytime soon", even with Singapore now out of its "circuit breaker" period. 

READ: Grab prepares for 'long winter' as COVID-19 hits revenue

The ride-hailing industry has been badly hit by the coronavirus outbreak, with Grab co-founder Tan Hooi Ling stating last month that the firm is preparing for what is potentially a “very long winter” as overall revenue has dropped. 

Elsewhere, American ride-hailing giant Uber - which holds a stake in its former rival Grab - announced last month it was laying off more than 6,000 employees worldwide and closing 45 offices, including its Asia Pacific headquarters in Singapore, due to the impact of COVID-19. 

READ: COVID-19: Grab's senior leaders to take pay cut of up to 20%

Grab’s transport business will continue to be impacted in the short to medium term, Mr Yee said, adding that the business has decreased by a “double digit percentage”, without giving further details. 

In the short term, Grab drivers will likely have to pick up passengers as well as do deliveries to earn an income, he said. 

The move into areas such as food and grocery deliveries is part of the ongoing diversification of Grab’s business, and has been a part of its growth strategy for several years, Mr Yee said, adding that the COVID-19 pandemic had accelerated this process.  

“We’ll continue to do that, but transport remains a big part of our business.” 

READ: From taxi driver to transport ambassador: How Singapore’s cabbies are navigating the COVID-19 downturn

When asked how Grab’s career support portal may impact its driver pool, Mr Yee said people had various reasons for choosing to become private-hire drivers, including those who saw it as a temporary position. 

“And if the reason (for driving) is for temporary (income), and they would like to seek something better outside, we are more than happy to support them,” he said. 

Grab’s move into its new S$181 million headquarters in the one-north business district - originally scheduled to be completed by the end of this year - is also likely to be delayed by “a couple of months” due to the halt in most construction work during the circuit breaker period, he added.

Mr Yee said he is optimistic that the worst is over. 

“Hopefully we have bottomed out now and things will just be going upwards from here, but at a slower pace,” he said, adding he expects Grab’s business to return to pre-COVID-19 levels within the next six months. 

“That's the ideal case,” he said.

Source: CNA/az(mi)

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