A drop in demand for taxi services has seen cab-hailing apps fire their employees to cut expenses. South-East Asia’s leading cab-hailing service Grab Holdings has announced it will fire 360 employees to cut costs amid the pandemic.
Further, Grab will focus on core projects, and reallocate staff to functions like delivery services as it weathers the impacts of the Coronavirus.
“Over the past few months, we reviewed all costs, cut back on discretionary spending, and implemented pay cuts for senior management. Despite all this, we recognize that we still have to become leaner as an organization to tackle the challenges of the post-pandemic economy,” read a statement from Grab CEO Anthony Tan.
Cutbacks in Grab reflect the plight of ride-hailing services globally as lockdowns reduce movement. In March, demand for taxi services fell by over 60%, forcing giants like Uber to cut their staff by 14%. The company announced further 3,000 cuts in May as it scaled down non-core operations. In April, Lyft made similar job cuts, reducing its staff base by 982 employees. It also implemented pay cuts for executives.
Shifting to Delivery Services
The drop in demand for taxi services, however, has been accompanied by a jump in demand for delivery services. As a result, ride-hailing companies globally and locally are shifting focus to delivery.
The surging demand for take-out from restaurants has made ride-hailing companies to invest in delivery services, specifically no contact delivery to eliminate cross-contamination of food and prevent the spread of pathogens. Recently, Uber considered acquiring Grubhub to boost its food delivery service.
In May, Lyft launched a delivery service “Essential Deliveries” to deliver meals and groceries. Similarly, Uber is planning to expand to grocery delivery in Latin America, seeking a majority share in Cornershop.
Locally, motorbike hailing app Safeboda expanded its services to delivery of essential goods. The app partnered with local restaurants and shops to deliver foods and groceries. Moreover, it leveraged on its pre-existing wallet to enhance contact free delivery, through cashless payment.
In May, its rival app Bolt introduced a delivery service to leverage on its tech and driver network. Other players like Little cab went beyond delivery services, to add ambulance services for its customers.
