Disclaimer : I’m not invested in ComfortDelGro. I’m just interested in the changing landscape!

The share price of ComfortDelGro has fallen a fair bit in recent days on the back of negative news, one after another. I’m not interested in getting in, though. Many blog posts discuss the business of ComfortDelGro – the taxi segment, in particular, because it is the one that’s in trouble.

Just wanted to throw out some observations I’ve made along the way, so that we can look at the situation from the perspective of one of ComfortDelGro’s main rival in the taxi business – Grab. I see Uber as being part of the landscape, but probably not a long-term threat to either, so I don’t talk about it too much here.

I must admit, having all three around is the best scenario for consumers as I’ve benefited tremendously over the last four years! I regularly spend at least $100 a month on cab rides and private hires over the past decade (oh wow that’s like $12,000 but how does one value quality of life), and I have my (more than) fair share of being screwed over by cab drivers in the past. Am I much happier with the transport landscape now? Definitely.

When It All Started

Singapore is small, open and developed. Anyone who is decently capable and has performed some sort of horizon scanning for disruptions and threat-modelling would have seen this coming.

Take Robo-advisors for example. I already wrote about Betterment in 2014. It is only a matter of when, and not if, robo-advisors will arrive in Singapore. No excuses.

It is probably in early 2013 when Grab and Uber made its way to our sunny island. It was also in May 2013 that Singapore Labour Foundation, the largest stakeholder then, sold its entire 12% in ComfortDelGro at a price of $1.94 when the prevailing market price was $2.18. – which promptly started a nose-dive.

In September 2013, GrabTaxi (its name then) initiated its Series A Funding. Subsequently, Series B in May 2014 and Series C in October 2014.
Source : Crunchbase

Vertex Ventures, a member of Temasek Holdings, took part in all three rounds. Must have snagged plenty of “unicorn start-up” shares?

A unicorn is a startup company valued at over $1 billion.

Interestingly, Temasek and GIC holds a huge number of unicorns in their stable. Trivial – Grab is formerly a Malaysian start-up called MyTeksi before changing to GrabTaxi and then Grab.

Vertex particpated in all first three rounds of funding A, B and C. I believe (lazy to check) Vertex did not participate in any future funding rounds after that – small money, huge returns.


Taxi drivers are a very special bunch of people. Back when GrabTaxi started gaining ground, I spoke to non-CDG cab drivers who “educated” me that Grab is backed by “Ah Gong”. “Safe one lah”.

At later stages, conversations with non-CDG cab drivers revealed that some are doing well, if not better than in the past, because now they don’t have to drive around aimlessly. They enjoy a bigger far bigger pool of riders via the GrabTaxi app module or a flat rate via the JustGrab app module instead of relying on street hails.

Instead of shoring up their defenses in 2013, it does seem like too little, too late, four years on.

Edit : I recall a story from a taxi ride in either 2014 or 2015. The uncle was well into his fifties or sixties, and he was telling me how as a cab driver, 手停,脚停,嘴巴就停 – which means if they don’t work, they can’t feed themselves or them family. There he was, fiddling with a large screen mobile phone with the Grab app and told me how he learnt to use it, or else he would be made obsolete.

Who Is The Largest Of Them All?

ComfortDelGro prides itself as one of the largest land transport companies in the world, coming in at second place at a point in time.

The latest round of funding valued Grab at more than $6-billion dollars. Bloomberg calculates ComforDelGro market cap at $4.272-billion dollars. Just some food for thought.

The Pain Will Continue beyond 2018

After two rounds of funding in 2016 and 2017, Grab CEO has hinted that the flood of capital meant there is no need to list on stock exchanges in either 2017 or 2018.

A common argument is that the business model of Grab and Uber is unsustainable in the long term. True that they are burning through cash by dangling subsidies for riders, and incentives for drivers.

Then again, they do not have to be accountable to shareholders in the short-term. According to Grab, they are already profitable in some markets, with 70 percent of the market share in the region.

One Trick Pony – Or not?

It would be simplistic to think of Grab as just a ride-hailing app. Just like ComfortDelgro has multiple business segments and Uber has UberEats/UberRush/UberCargo etc, what does Grab have?

Like ComfortDelGro, Grab isn’t a one-trick pony. Ride-hailing isn’t the only reason that investors are dumping their money at Grab. It is their potential in FinTech. It is the integration of Grab with e-payments that makes it truly scary. And that’s in the Southeast Asia region, not just Singapore. Look out for GO-JEK Indonesia for another big player in the same niche as Grab.

With an existing huge pool of users (75% paying via GrabPay), Grab is going to extend the use of GrabPay to F&B, retail and entertainment etc in Q4 2017. By leveraging the stickiness of GrabPay, it is the up-and-coming e-payments solution that Singapore already has. Bye Razer, maybe?

Uber – Friend Or Foe?

The global anti-Uber alliance used to be China’s DiDi, India’s Ola, Grab and Lyft. Having lost and conceded defeat in the China market, the Uber share-swap deal with Didi Chuxing has complicated the battle of the transport alliance.

With the exit from the China market, Uber has renewed and significant interest in trying to succeed in Southeast Asia market. Uber, the juggernaut that is ten times as valuable as Grab, is a wildcard and there is no way to know what they will do.

“Starting with transport, Grab is establishing a clear leadership in Southeast Asia’s internet economy based on its market position, superior technology, and truly local insight,” said Cheng Wei, founder and CEO of DiDi.

So, DiDi founder, you guys have Grab in your left pocket and Uber in your right pocket. Do you mean Grab > Uber ?

Once again, I’m not invested in ComfortDelGro and don’t intend to do so in the near future.