What’s Next For The Shared Economy
In 2019, hardly a month went by without Uber making headlines and the end of the year was no exception. One of the most interesting news items, in addition to the company’s co-founder, Travis Kalanick, stepping down from the board, was the announcement about Uber Works. The ride-sharing giant wants people to also use one of its apps when they need someone to cook or clean the house. Interesting, right? While this idea is not new, Uber is definitely the most prolific tech platform to consider investing in it. This also proves that ride-hailing providers are stepping outside their initial boundaries and taking advantage of their resources to make the most of the shared economy.
The Singapore market, with its significant number of expats and modern infrastructure, is a great place to launch such tech-based services that are designed to make life easier. One of the reasons is the accessibility of digital products. The country’s population is very tech savy. For example, in Singapore, in 2018, 89 percent of the population was using the internet, making the country a leader in South-East Asia, according to Statista. The prediction for 2019 was 91 percent and for 2023, 97 percent. The government’s Smart Nation strategy also helps boost such businesses forward, investing in a vision that is meant to grow the state’s economy.
Digital payments and transportation are the most dynamic sectors in Singapore’s shared economy.
Tech businesses that are thriving in these industries are taking steps toward new segments. Grab and telecom company Singtel just announced they will be applying for a digital full bank license, mainly targeting small and medium-sized enterprises and offering simple credit and investment products. The partnership, where Grab holds a 60 percent share, is expected to progress to the creation of a fully-functioning bank. Grab, a self-entitled super app, also offers food ordering or hotel booking services, in addition to ride-sharing (and more).
Gojek, launched in 2015, also expanded from motorbike ride-sharing to delivery, online shopping and an array of “lifestyle” services through its GoLife app. While a newer player in the Singapore market—where it celebrated a year this past December—Gojek also invested in GoDaily (daily needs order and delivery service), GoClean, GoLaundry, GoFix, GoGlam, GoMassage or GoAuto (car service booking) and many more, all available via GoLife. However, the firm announced that it will be shutting down most of these due to poor performance. GoClean and GoMassage will remain, according to Deal Street Asia.
Gojek also wants a piece of the digital payments pie. The company is one step away from purchasing Moka, a point-of-sale start-up, for US$120 million (S$163 million). The deal is yet to be completed.
Filo Technologies donned a business model similar to Gojek. The company entered the Singapore market in 2018 offering ride-sharing services. The Filo platform also provided the possibility to book various services such as coaching, babysitting or pet walking as well as a variety of home-related
work. Unfortunately it soon became unavailable for download in the city-state.
This just goes to show that tech companies are shifting strategies going into 2020 and focusing more on profitability instead of scaling and growth. At the basis of this change are the stories of WeWork’s IPO and Uber’s controversies. Instead of planning to conquer the world by offering an overwhelming array of products or services, tech firms are maximizing their know-how and notoriety in just a couple of branches, pushing for more quality and going for an extra layer of analysis before leaping into a