SINGAPORE: Revving up competition in the local market, another new player has joined the ride-hailing race with a blockchain-enabled mobile application that touts zero commission for drivers among its differentiating points.
Called TADA, which means "let's ride" in Korean, the on-demand point-to-point transportation service app was launched by Singapore-based company Mass Vehicle Ledger (MVL) on Thursday (Jul 26).
Founder and CEO Kay Woo, who is from South Korea, described Singapore as a “perfect” market despite intensifying competition in the ride-hailing scene, largely due to a population of fast technology adopters.
The firm has already recruited 2,000 licensed private-hire car drivers ahead of its roll-out.
MVL said it will not collect commission fees from drivers using its platform – a departure from other ride-hailing services, such as incumbent Grab, which charges a 20 per cent commission.
AdvertisementDrivers will also not be bounded by any exclusivity agreements, as well as acceptance and cancellation rates, Mr Woo said.
Similarly for riders, there will not be any cancellation penalties while fares will be kept competitive, he added.
“We don’t charge drivers any commission, so there’s room for lower prices. That’s how we share the benefits,” said Mr Woo.
There will be two forms of pricing: A fixed-fare rate for point-to-point rides and metered pricing starting from a base fare of S$2.30 in cases where riders book a ride via a taxi. For now, a 3.4 per cent transaction fee will be charged for credit card payments.
MVL will also factor in surge pricing, although it is still surveying riders and drivers to determine a reasonable price range.
“We want to create a community where drivers and riders are treated as equal members. We don’t want to see them arguing over cancellations for instance," said Mr Woo in an interview with Channel NewsAsia ahead of the launch.
AdvertisementAdvertisement"If you don’t do well, there will be no incentives but if you do, you get more. By doing so, we hope to create a positive reinforcing environment."
These incentives will come in the form of points, which can be converted into MVL’s cryptocurrency called MVL coins.
For riders, these rewards will be given when they provide additional data into the system, such as providing reviews for their trips.
For drivers, points can be earned just by turning on the MVL app as they drive around. Those who receive better reviews and drive safely will also get rewarded with more points.
These points can be used to redeem goods and services with MVL’s partners, said Mr Woo, though he remained tight-lipped about who they are, citing ongoing negotiations.
Users can also opt to cash out their MVL coins. Listed on a coin exchange in South Korea, one MVL token is equivalent to about USD$0.05 (S$0.06) at the moment, the founder added.
ALTERNATIVE TRANSPORT CHOICE; OPEN TO WORKING WITH OTHER PLAYERS
MVL raised around S$22 million through its initial coin offering (ICO) earlier this year and has been using these funds to fuel its foray into Singapore.
Based out of an officeat Oxley Bizhub in Ubi Road, the two-month-old start-up now has 36 employees. With operating costs remaining "quite low" for now, Mr Woo said its ICO proceeds will be sufficient to keep operations running.
Claiming to be a non-profit model, it stressed that it will not engage in a cash war to capture market share – a strategy that was previously adopted by ride-hailing giants Grab and Uber in Singapore until the latter was taken over by its Southeast Asian rival in March.
Instead, Mr Woo said he wants to grow MVL in an organic way and has a bigger aim to shake up the mobility industry by creating an ecosystem where there is transparent sharing of all mobility-related data, such as traffic conditions.
Apart from ride-hailing, it plans to integrate other key players including used car services, insurers and even repair shops.
Its blockchain platform will track and gather data on all these vehicle activities and with the consent of its users, these data might be sold to researchers or related transport companies for revenue in years to come, Mr Woo said.
“TADA is just one example of a service that runs on top of our blockchain protocol," he said.
"The app will have a similar user experience for both drivers and riders, but underneath, it is supported by blockchain technology that tracks and saves all the driving data.”
“For instance, traffic information collected during a trip is very useful and valuable to car makers of autonomous driving research companies,” added Mr Woo, who stressed that privacy data, such as the driver’s name for that trip, will be “concealed and separated”.
He also said that blockchain’s decentralised, immutable and transparent nature will make it more secure than a central database.
"If you put all eggs in one basket, they just need to attack one basket but if you use blockchain, data is saved on distributed storage to protect the storage and ownership."
Given how it is up against incumbent Grab and a handful of new players such as Ryde, Mr Woo remains confident that MVL's zero commission fee can help it to attract at least 3,000 drivers next month and 10,000 by the end of the year.
It is also in talks with one taxi company and other car rental firms to boost its fleet.
On whether it is confident of attracting riders, particularly given the niche user adoption of cryptocurrencies in Singapore, Mr Woo acknowledged that this would be a “harder challenge” and plans to work with other participants within the blockchain community.
A potential challenge could also come in the form of higher prices on its app during non-peak hours as it works to stabilise its pricing mechanism, he added.
"But we are not going to spend tons of money on promotions. That's not the way to compete with the giants who have much more resources; that's the fast way to kill yourself."
Mr Woo said: "We are here to offer an alternative choice to the Singapore community ... If there is a way to work with existing players, be it the giants or new players, we are open to that."
Mr Lee Seng Leong, 54, said he signed up with MVL after being attracted to its zero commission fee.
While the cryptocurrency reward system sounds like a plus point, it remains a "complicated" concept for him at the moment.
"(The zero commission) is the most important factor," he said. "If prices are about the same, we will earn more. Being a driver is all about the money and whichever app is better, I'll go for it."
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