SINGAPORE: Revving up competition in the local market, another new player has joined the ride-hailing race with a blockchain-enabled mobile application that touts zero commission for drivers among its differentiating points.
Called TADA, which means "let's ride" in Korean, the on-demand point-to-point transportation service app was launched by Singapore-based company Mass Vehicle Ledger (MVL) Foundation on Thursday (Jul 26).
The firm has already recruited 2,000 licensed private-hire car drivers ahead of its roll-out, according to founder and CEO Kay Woo who is from South Korea.
MVL said it will not collect commission fees from drivers using its platform – a departure from other ride-hailing services, such as incumbent Grab, which charges a 20 per cent commission. Drivers will also not be bound by any exclusivity agreements, as well as acceptance and cancellation rates.
Similarly for riders, there will not be any cancellation penalties while fares will be kept competitive.
“We don’t charge drivers any commission, so there’s room for lower prices. That’s how we share the benefits,” said Mr Woo in an interview with Channel NewsAsia ahead of the launch.
There will be two forms of pricing: A fixed-fare rate for point-to-point rides and metered pricing starting from a base fare of S$2.30. Meanwhile, a 3.4 per cent transaction fee will be charged for credit card payments.
MVL will also factor in surge pricing, although it is still surveying riders and drivers to determine a reasonable price range.
“We want to create a community where drivers and riders are treated as equal members. We don’t want to see them arguing over cancellations for instance,” said Mr Woo.
“If you don’t do well, there will be no incentives but if you do, you get more. By doing so, we hope to create a positive reinforcing environment."
These incentives will come in the form of points, which can be converted into MVL’s cryptocurrency called MVL coins.
For riders, these points will be given when they provide additional data into the system, such as writing reviews for their trips.
For drivers, points can be earned just by turning on the MVL app as they drive around. Those who receive better reviews and drive safely will also get more points.
These can eventually be used to redeem goods and services with MVL’s partners, said Mr Woo, though he remained tight-lipped about who they are, citing ongoing negotiations.
Users can also opt to cash out their MVL coins, the founder added. Listed on decentralised crypto exchange Idex, one MVL token last traded at US$0.005 on Thursday afternoon.
SHAKE UP MOBILITY INDUSTRY
MVL raised around US$16 million (S$22 million) through its initial coin offering (ICO) earlier this year and has been using these funds to fuel its foray into Singapore.
Based out of an office at Oxley Bizhub in Ubi Road, the two-month-old start-up now has 36 employees. With operating costs remaining "quite low" for now, Mr Woo said its ICO proceeds will be sufficient to keep operations running.
Claiming to be a non-profit model, it stressed that it will not engage in a cash war to capture market share – a strategy that was previously adopted by ride-hailing giants Grab and Uber in Singapore until the latter was taken over by its Southeast Asian rival in March.
Instead, Mr Woo said he wants to grow MVL in an organic way and has a bigger aim to shake up the mobility industry by creating an ecosystem where there is transparent sharing of all mobility-related data, such as traffic conditions.
Apart from ride-hailing, it plans to integrate other key players within the industry, including used car services, auto insurers and even vehicle repair shops.
Its blockchain platform will track and gather data on all these vehicle activities, and with the consent of its users, the data might be sold to researchers or related transport companies for revenue in years to come, Mr Woo said.
“TADA is just one example of a service that runs on top of our blockchain protocol," he said. "The app will have a similar user experience for both drivers and riders, but underneath, it is supported by blockchain technology that tracks and saves all the driving data.”
“For instance, traffic information collected during a trip is very useful and valuable to car makers of autonomous driving research companies,” added Mr Woo, who stressed that privacy data, such as the driver’s name for that trip, will be “concealed and separated”.
He also said that blockchain’s decentralised, immutable and transparent nature will make it more secure than a central database.
"If you put all eggs in one basket, they just need to attack one basket but if you use blockchain, data is saved on distributed storage to protect the storage and ownership."
YAY OR NAY?
Given how there has been increasing adoption of blockchain across various industries, Mr Amit Zavery, executive vice president at Oracle Cloud Platform, told Channel NewsAsia that it is hardly surprising to see the technology being used by a ride-hailing player.
He explained that the technology is well-suited for a system, such as a ride-hailing service, that runs on data across multiple parts of the supply chain involving various parties and types of transactions.
The use of blockchain also yields other benefits, such as better security, the elimination of a middleman and scalability that allows any number of users to participate, added Mr Zavery.
Nevertheless, experts said users of a ride-hailing app ultimately place more emphasis on the prices they pay for their trips, and how quickly they get matched to a commuter or driver.
Assistant Professor Terence Fan from the Singapore Management University said: "Using the blockchain technology may not make it easier to break into the market because this is part of its internal operations. It’s something that neither the ride hailers nor ride providers can see or feel."
While the recruitment of 2,000 drivers is an “encouraging starting point”, Assoc Prof Fan wondered how that relates to the number of cars that will be available at any one time, which affects the time needed to match a driver to a commuter.
The transport specialist also questioned if the elimination of a middleman means a lack of a feedback channel for users.
"Quality matters at the end of the day. People could be open to trying out alternatives but the question of whether they are going to keep trying remains," he told Channel NewsAsia.
GIVING RIDERS AN ALTERNATIVE
Despite going up against incumbent Grab and a handful of new players such as Ryde, Mr Woo was confident that MVL's zero commission fee can help it to attract at least 3,000 drivers next month and 10,000 by the end of the year. It is also in talks with one taxi company and other car rental firms to boost its fleet.
On whether it is confident of attracting riders, particularly given the niche user adoption of cryptocurrencies in Singapore, Mr Woo acknowledged that this would be a “harder challenge” and plans to work with other participants within the blockchain community.
A potential challenge could also come in the form of higher prices on its app during non-peak hours as it works to stabilise its pricing mechanism, he added.
"But we are not going to spend tons of money on promotions. That's not the way to compete with the giants who have much more resources; that's the fast way to kill yourself."
Mr Woo said: "We are here to offer an alternative choice to the Singapore community ... If there is a way to work with existing players, be it the giants or new players, we are open to that."
One private-hire car driver that decided to give MVL a shot is Mr Lee Seng Leong. The 54-year-old, who has been a full-time driver with Grab for more a year, listed the zero commission fee as the most important factor.
While the cryptocurrency reward system sounds like a plus point, it remains a "complicated" concept for him at the moment.
"If prices are about the same, we will earn more (if there’s a zero commission fee). Being a driver is all about the money and whichever app is better, I'll go for it."