Look out Uber and Lion City Rental, Grab has just raised US$700million to build the largest car rental fleet in the region. The amount of funds raised is the largest ever by a Southeast Asian start-up company.
The Straits Times reported that Grab has also announced that it has inked an exclusive partnership with SMRT.
More cars, better rental prices and increase supply
Grab believe that with the new financing on hand, it will be able to ramp up the supply of vehicles and make more car available for lease at more favourable prices for their driver partners. By attracting more drivers to drive with Grab, it will increase Grab presence on the road and make rides readily available and affordable for riders.
Market leader in the region
Grab holds an overwhelming 72 percent market share in the region and look set to further increase through their largest car rental fleet plans in Southeast Asia.
Dominate Singapore market
Grab has been aggressive in their attempt to dominate the Singapore market. They introduced a massive rental rebate program to attract taxi-drivers, particularly those from Comfort Taxi, to swap from driving the taxi to private-hire. Response to the promotion was overwhelming and a reported 3000 taxi-drivers were considering jumping ship to Grab. Market observers believed that the promotion was to rival Uber’s Lion City Rental Suresave campaign which was running at the same period.
The partnership with SMRT will grant Grant exclusive access to SMRT existing and future fleet. SMRT is one of the biggest taxi operators in Singapore and also operates a private-hire car rental fleet.
Grab Rental vs Lion City Rental
Starting a mega-sized rental fleet is not new in Singapore. Uber’s owned Lion City Rental was formed with the intention of providing affordable rental rates and to lock in drivers on the Uber platform. Lion City Rental owns the largest fleet of private-hire vehicle in Singapore but has a large fleet of vehicle sitting unused in carparks across the island. It was also reported that LCR was selling off its fleet of excess vehicle.
Will the race to become the biggest car rental fleet result in the same outcome as the current leader? Lots of empty cars and lack of hirer