Skift Take

New Uber CEO Dara Khosrowshahi has many challenges to contend with, and one is Singapore-based ride-hailing company Grab.

Singapore-based ride-hailing company Grab said Wednesday that it has raised $2.5 billion in a funding round that included an investment from Toyota Group — adding to an investment by Japan’s Softbank — as the companies also announced a new technological partnership. A personal story puts this news into context.

A recent trip to the coastal city of Danang in Vietnam reminded me why Grab is Southeast Asia’s dominant ride-hailing operator.

During the Vietnam War, Danang was where first American combat troops landed, serving as a busy American air base. Today, there are 55 kilometers of pristine white-sand beaches, lined with new resorts. The plane arrived late at night, so our party booked the hotel’s car service. The 30-minute ride in a seven-seater van cost 950,000 dong, or about $41.

The next day, we had no trouble finding a ride to Hoi An, a Unesco World Heritage site that cost 600,000 dong ($26). The driver seemed pretty happy—later that day, I learned why. After some shopping, I opened my Uber and Grab apps to see if they worked. Grab was available, so we hailed a van to go to a seafood restaurant a 20-minute ride away, and the quoted price was just 48,000 dong ($2)!

Not only that, I got a text message from the driver, Trinh Hai Ho: “I am arriving now.”

“Can you please come directly to the taxi stand outside the lobby?” I replied, and he showed up right away.

I soon learned that Trinh Hai Ho doesn’t speak a word of English—Grab’s in-app messaging service had seamlessly translated the messages. Although I knew Grab had introduced this service in October, it was still an eye-opening experience to see it in action. For the next four days, we used nothing but Grab to go everywhere, including three trips to Madame Lan Restaurant  for amazing Vietnamese food. (Highly recommended!)

My experience with Grab, which debuted in 2012, shows why the startup is doing well in Southeast Asia, where it competes head-to-head with Uber across seven countries: Indonesia, Malaysia, Myanmar, Singapore, the Philippines, Thailand and Vietnam. And just today, Toyota announced it’s making a strategic investment in Grab.

In-app translation isn’t exactly new; Didi, the ride-railing company that vanquished Uber in China, also offers the feature. Uber’s rivals are using it in the right way in the right places to improve customer experience. All of this underscores how Grab better understands the needs of its local customers, such as accepting cash when Uber only took credit cards in places where cash ruled.

Today, Grab is in 87 cities and is aiming to hit 100 by the end of this year. Grab now has 95 percent in third-party taxi-hailing and 72 percent in private-vehicle rides, according to the company. Uber struck deals with Didi in China and Yandex in Russia, effectively ceding markets there to larger, more locally dominant rivals. It’s fair to ask whether that might happen with Grab.

Meanwhile, the competition is good for consumers. My last Grab ride in Danang was from the city to the airport. It cost just $3.

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Tags: grab, ride-sharing, uber

Photo Credit: Lim Kell Jay is the head honcho of the Singapore office of Grab, the ride-hailing app based in the city state. Grab has grabbed $2.5 billion in funding this year to fend off Uber. Grab