The pandemic has not been kind to the ride-hailing industry. Just in case you’re wondering how rough it’s been, Grab posted a $1.1 billion loss in the final quarter of 2021, bringing its losses for the year to a whopping $3.56 billion. That’s around P186 billion in local terms.
According to a report by Reuters, Grab’s shared took a 37% dip last week following the news. The Singapore-based company’s struggles are reportedly owed to the double-edged sword caused by the latest COVID-19 pandemic developments.
On one hand, demand for rides has begun to recover, with more people able to go out safely. But on the other, fewer Grab users are now opting to have food delivered, choosing instead to dine out.
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Grab has increased driver incentives to help keep up with demand, and has offered more promos to entice diners to have food delivered. These actions reportedly played a big part in the company’s big fourth-quarter losses last year. Grab is also being challenged by GoTo, a new regional ride-hailing powerhouse formed by Gojek and e-commerce company Tokopedia.
“We plan to be judicious and disciplined in allocating capital, as we double down on the long-term growth opportunities of our on-demand, advertising and financial services businesses,” Grab’s chief financial officer Peter Oey said in a statement.
To give you a better idea of the kind of toll COVID-19 is taking on the industry, Grab’s losses in 2020 totaled $2.75 billion. Do you think 2022 will be the year the company is able to bounce back?