E-Hailing Services Regulations and Business Performance

The assignment delves into the analysis of e-hailing services regulations in Malaysia, exploring their effects on business performance. It considers various aspects such as organizational culture, leadership styles, and value chains to provide a comprehensive understanding of the topic.

Expanding Grab Business in
Brunei

TABLE OF CONTENTS
EXECUTIVE SUMMARY.............................................................................................................1
1. BACKGROUND.........................................................................................................................1
2. RATIONALE...............................................................................................................................1
2.1 Product detail....................................................................................................................1
2.2 Competitors......................................................................................................................2
3. SUPPORTING INFORMATION................................................................................................2
3.1 Information about Home country.....................................................................................2
3.2 Information about Host country.......................................................................................3
3.3 Economic Integration between both nations....................................................................5
3.4 Theoretical overview........................................................................................................5
4. IMPLEMENTATION..................................................................................................................5
4.1 Proposed Strategy.............................................................................................................5
4.2 Value Chain......................................................................................................................6
4.3 IT related aspects..............................................................................................................7
4.4 Finance.............................................................................................................................7
5. RISK ANALYSIS........................................................................................................................7
6. CSR..............................................................................................................................................8
7. RECOMMENDATION...............................................................................................................8
8. REFERENCES............................................................................................................................9

EXECUTIVE SUMMARY
The report is provided to Board on how Grab business is expanding its business to the
South-East Asia country Brunei. Effective and better services will be provided to Bangar city in
the nation to all of local passengers who face difficulties in transportation. E-hailing services will
be given and great opportunities for growth will be attained.
1. BACKGROUND
The proposed board paper is relation to Grab Company which is expanding to Brunei for
earning profits. Organisation operated in Singapore earlier and now operates in Malaysia has
good customer base as it provides online taxi booking services to customers. It operated in
Malaysia till 2012 and idea was created by Anthony Ton. Grab Company has a remarkable
market share in the Malaysian market. It is evident from the fact that more than 141,000 drivers
were part of organisation in financial year 2015 collectively in South-East Asian nations. Brunei
is the selected country to expand business to garner more quantum of profits. It is the sovereign
state located on the Island of Borneo in South-East Asia which will be fruitful for the
organisation as it has good brand image and new market will be met demand of people of Brunei
and thus, higher profits would be achieved and expansion will be successful (Schaper, Volery,
Weber and Gibson, 2014). UBER which is similar ride-sharing firm which is effectively
operating in European nations with nearly 28 member states. It provides vehicle for hiring
purpose and also takes customers towards destination through booking on mobile app.
2. RATIONALE
2.1 Product detail
Grab business provides transportation services to customers at fair charges so as to
increase satisfaction level up to a high extent. It has good market share along with higher amount
of safety being imparted to females so that they may reach to their destinations quite safely.
Furthermore, cameras are being installed which keeps an eye on drivers by which no incident
may happen and if something happens, it is effectively recorded in the cameras and thus, higher
safety is provided to all the people regardless of their age, gender and proper security is provided
which has given good quantum of market share in just 6 years of operations in Malaysian
market. Firm has implemented an software to effectively track driver's habits and has been
fruitful for it as nearly 35 % of improvement can be seen. Rewards and free rides related services
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are imparted to passengers leading to higher level of satisfaction. Brunei will be fruitful for Grab
business as there is shortage of transportation facilities and furthermore, unemployment rate is
maximised to 7.10 % in financial year 2017 which was 6.90 % in 2016. Hence, employment
opportunities will be generated in the nation. Hence, dual benefits will be attained as on one
hand, expansion may be made and society may be served leading to decrease in unemployment
rate in Brunei. The market of Brunei is picked as it had suffered a lot because of earlier reforms
and network was not widened particularly road network. Grab business has market potential to
achieve maximum customers as affordable prices would be offered by penetrating market. The
transport system of Brunei has been evolved rapidly as Brunei Darussalam overhaul is under
process and government plans Bus Rapid Transit (BRT) for encouraging use of transport. Grab
business can add value by reducing waiting time period instantly. It could be possible when
customer books the ride, driver may receive alert in short time and waiting time can be
minimised. Business could provide delivery of heavy or capital goods of client on consignment
basis from one destination to other leading to diversified portfolio.
2.2 Competitors
The rivals are required to be scrutinise so that business may be able to attain good market
share and outreach competitors quite effectually (Agus and Shukri Hajinoor, 2012). One of the
rival is Dart Car services which is operating in Brunei. Although, customers are not attracted to
firm as prices charged are too expensive. This is an opportunity for Grab business to attain
market of the host country by providing value added services to people and that too at affordable
prices so as to gain customer satisfaction. Moreover, there are plenty of services such as Grab
Bike, Grab Car, Grab Food and many more which can fulfil need of citizens of Bangar. Dart
Company also provides taxi services but are costly and Grab business can attain competency
over it.
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3. SUPPORTING INFORMATION
3.1 Information about Home country
The above chart clearly shows that Malaysian economy is increasing at a good rate. It is
evident from the fact that despite decrease in 2016 to 294.54 billion USD has effectively reached
to 314.5 mark in 2017. This indicates that economy contributes nearly 0.51 % of total growth in
the world. The annual GDP growth rate was 5.40 in 2017 which is more than previous year. It
further furnishes information regarding exports are increasing up to a higher rate, government
spending is maximised and consumption pattern has undergone tremendous positive change in
past couple of years. Strong foreign trade including exports and imports has been implied
positive growth of the nation. Export oriented countries for Malaysia are China, ASEAN, EU
(European Union), Japan, USA, Turkey, Hong Kong to name a few (Malaysia GDP. 2018).
The taxi services are preferred by people as nearly 80 % of population likes to book an
online taxi which eases off their problems in carrying out traditional booking. E-hailing services
are also demanded by citizens and Grab business can earn money. Recently, there are new
regulations initiated on e-hailing services such as organisations must register with Land Public
Transport Commission (SPAD), insurance cover must be there for passengers, vehicles and
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Illustration 1: Malaysia GDP Rate Source: tradingeconomics.com

driver would have to take 6 hour course for amount of RM200 prior picking customers and other
as well (Fun. 2018). These new regulations are implemented from 12 July 2018.
The above chart shows that SME has been integral part of growth of Malaysian economy
in recent years. It is evolved in agriculture, construction, services, manufacturing and mining
sector quite remarkably. E-commerce of Malaysia is enhanced as government is spending and
helping E-commerce companies to achieve growth. Total retail spending from 0.5 % in 2014 to
5% would be achieved by 2020 year.
3.2 Information about Host country
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Illustration 2: SME GDP in Malaysia Source: dosm.gov.my

Brunei is a smaller country in South-East Asia and exports are the major income of the
nation. It is evident from the above figure that GDP rate is declined in 2016 to 11.4 billion USD,
however, it increased to 12.13 in 2017. Nation's major exports are petroleum products such as oil
and natural gas leading to contribute of almost half growth of economy. It clarifies the fact that
exports mainly are crude oil and income from transportation services are very low (Brunei GDP.
2018).
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Illustration 3: Brunei GDP Rate Source: tradingeconomics.com

Total contribution in GDP in terms of transport is 122.10 in 2017 which was 98.50 in
previous year which means that Grab business can effectively initiate its services in the nation so
that income can be generated in a better way and more markets may be captured leading to
higher growth and meeting its desired goals. Organisation can provide variety of services which
will produce plenty of profits. The population is 417200 estimated in July 2015. GDP (PPP) in
2018 is 33.376 billion USD. The per capita on the basis of GDP is 77699 USD (billions). Official
languages are Malay and English.
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3.3 Economic Integration between both nations
The economic integration can be evaluated between Brunei and Malaysia as both are part
of ASEAN Economic Community. It means that trade will be increased between two countries
leading to more growth of both nations in terms of economy. The investment in Brunei will be
done by the Malaysian investors which will impart dual growth to both nations. Since, Brunei is
small country, engaging in joint venture would be fruitful for the nation. On the other hand,
Ministry of both country is required to integrate in that manner which will be beneficial for Grab
business to easily achieve profits in new market through expansion (Aziz, Abdullah, Tajudin and
Mahmood, 2013).
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Illus
tration 4: Brunei statistics Source: country scorecard.com

3.4 Theoretical overview
Grab business is expanding to South-East Asian country Brunei will give comparative
advantage for Malaysian company to make partnership with Bruneian organisation for operating
taxi services. It will provide base for strong growth as sales would be boosted and thus, better
services can be given to customers and attain good market share in new market. Linder theory of
international trade can be explained which implies that nations having more or less similar
demand will develop similar industries and hence, both will trade effectively with each other but
will sell differentiated goods (Linder theory. 2018).
4. IMPLEMENTATION
4.1 Proposed Strategy
In this scenario, proposed strategy for Grab Company is multi-domestic strategy to attain
customers in the new market with much ease. It can be interpreted that it is quite useful for
organisation so as to attract domestic customers. This strategy is useful for catering needs of
local people. In addressing this, advertisement and offers related to discounts should be done in
Malay language which is official language of Brunei. Multi-domestic strategy will be fruitful in
attaining or localising in Brunei. By relying on official language of Malay, Grab business would
be effectively localised. Complete reliance on Malay should not be made as many international
tourists visit nation (Gomez and Hsiao, 2013). Marketing and promotional tasks will be done on
social media channels like Facebook, Instagram and Twitter leading to cost-effective method for
company. It would be beneficial for marketing perspective as firm will not spend too much on
promotional activities as online sources will be sufficient. Hence, preferences of customers can
be effectively met and furthermore, firm would garner good profits and cater to the needs of
people of Brunei mainly in Bangar as they face difficulty in availing transportation facilities.
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4.2 Value Chain
The above value chain shows that when customer order for a taxi, pick-up location and
destination has to include in the mobile app by which it is given back to cab driver. By seeking
details, taxi comes and drops customers at their selected destination and at last payment is done
which is then divided to driver and admin share in the form of commission. Thus, whole process
is streamlined in that manner by which passengers' enjoys leisure drive and reach on to
destination within time and as a result, better services are provided to Grab Company which will
be beneficial in attaining good profits (Awadh and Alyahya, 2013). This will also provide safe
and secure rides to female customers and as such, rides would be secure enough. On the other
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Illustration 5: Value chain

hand, it can be seen that since, services are imparted and thus, no warehousing, production
related and distribution will be included in above value chain. Hence, in this scenario, e-hailing
services would be highly suited to the Bruneian people in Bangar in order to minimise lack of
transportation facilities and thereby, attaining larger customer base.
4.3 IT related aspects
The services such as Grab Taxi, Grab Car, Grab Bike will be provided to people of
Brunei so as to impart satisfaction. In GPS location sharing system would be needed to install so
that customers may be able to provide safety to them as complete transportation will be tracked
easily through GPS system. On the other hand, OTP (One Time Password) is required to share
by passengers before travelling in the taxi. Hence, it will be implemented so as to confirm that
same customer is travelling who has done booking. Code is provided to driver and then, journey
should be proceed. Payment option is also available to passengers such as online options or cash
payment. Hence, it will directly lead to customer satisfaction up to great heights as all such
facilities will be imparted to them (Rasli, Norhalim, Kowang and Qureshi, 2014).
4.4 Finance
Financing option will be imparted to customers. Open account method of payment will be
met in order to meet credit need of passengers. Grab Company is headquartered in Malaysia and
as such, Ministry of Brunei would come in collaboration to effectively meet that transportation
services could be improved so as to impart better quality services to customers who faces
transportation problem in Bangar city of Brunei. The open account method will be implemented
in this service as payment can be done in different phases. This means that in 30 days 25 % will
need to be paid, 40 % in next 60 days and remaining 75 % in the span of 90 days. Hence, enough
of profits can be garnered by the company by implementation of this method (Yee-Loong
Chong, Ooi, Bao and Lin, 2014).
5. RISK ANALYSIS
Brunei is a small nation having nearly more than 400,000 of population. The weather
change can affect Grab business up to a high extent and is required that strategy can be
implemented to overcome country risk in the best possible manner. Furthermore, private sector
of country remained underdeveloped which is just 3 % of share in overall GDP. The fiscal deficit
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of 12.4 % in the financial year 2017 has been identified because of reduction in revenues in oil
and natural gas field which is the main export of company.
Risk identified Likelihood (H, M, L) Impact (H, M, L) Managing risk strategy
Country Risk Medium Medium To impart services on
the basis of demand
and not overlapping
services.
Credit Risk Medium Medium To implement strict
credit measures and
restraining from
lenient terms of
payment
6. CSR
CSR (Corporate Social Responsibility) means that company whether it is contributing
towards the social responsibilities such economical, social and environmental related benefits in
the best possible manner. It means that Grab business has to initiate CSR in effective manner so
that customers may be benefited in a better way. It can be interpreted that safety of passengers
while travelling on destinations is the main objective of firm so that they may be provided with
quality services. Proper safety measures are given by the company to customers in the best
possible manner. It can be analysed that road campaign in Malaysia had been launched by firm
seeking to reduce number of accidents in the festive seasons or mainly in rush areas ( Fai, Mark
and Prasad, 2013). Road safety is a priority to Grab business and as such, it will be able to attain
good share which will be applied to Bangar city in Brunei. Proper safety will be given to
passengers by ensuring that no cheating is made and customers are safely reached to their
destinations. The environment of Brunei is that air pollution is 33.33 in recent year and has
reduced which means that Brunei has increased pollution and Grab business has to take measures
not to harm environment.
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7. RECOMMENDATION
Hereby it can be recommended to Grab business that reliable and quality services in
Malaysian market and furthermore, in Bangar located in Brunei. The passengers should be
provided with better services so as to minimise difficulties in transportation which they face. The
taxi call centres along with quicker time to book online mechanism needs to be installed so that
firm may effectively attain profits from the new location. The transport Ministry should be
collaborated by business so that enhanced and improved services can be given to Bangar
passengers and attaining higher profits.
8. REFERENCES
Books and Journals
Agus, A. and Shukri Hajinoor, M., 2012. Lean production supply chain management as driver
towards enhancing product quality and business performance: Case study of manufacturing
companies in Malaysia. International Journal of Quality & Reliability Management, 29(1),
pp.92-121.
Awadh, A.M. and Alyahya, M.S., 2013. Impact of organizational culture on employee
performance. International Review of Management and Business Research, 2(1), p.168.
Aziz, R., Abdullah, M., Tajudin, A. and Mahmood, R., 2013. The effect of leadership styles on
the business performance of SMEs in Malaysia.
Fai, T.J., Mark, J.E. and Prasad, P.N. eds., 2013. Polymers and other advanced materials:
emerging technologies and business opportunities. Springer Science & Business Media.
Gomez, T.E. and Hsiao, H.H.M. eds., 2013. Chinese business in Southeast Asia: contesting
cultural explanations, researching entrepreneurship. Routledge.
Rasli, A.M., Norhalim, N., Kowang, T.O. and Qureshi, M.I., 2014. Applying managerial
competencies to overcome business constraints and create values evidence from small
technology-based firms in Malaysia. Journal of Management Info, 3(1), pp.99-121.
Schaper, M.T., Volery, T., Weber, P.C. and Gibson, B., 2014. Entrepreneurship and small
business.
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Yee-Loong Chong, A., Ooi, K.B., Bao, H. and Lin, B., 2014. Can e-business adoption be
influenced by knowledge management? An empirical analysis of Malaysian SMEs. Journal
of Knowledge Management, 18(1), pp.121-136.
Online
Brunei GDP. 2018 [Online] Available Through: <https://tradingeconomics.com/brunei/gdp>
Malaysia GDP. 2018 [Online] Available Through:
<https://tradingeconomics.com/malaysia/gdp>
Fun. 2018 These are new regulations for E-hailing services in Malaysia [Online] Available
Through: <https://www.worldofbuzz.com/these-are-the-new-regulations-for-e-hailing-services-
in-malaysia-starting-july-12/>
Linder theory. 2018 [Online] Available Through:
<http://www.economicsdiscussion.net/international-trade/the-new-theories-of-international-
trade-economics/26942>
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