Carpooling app platform Ryde is focusing its attention on Singapore, which it says is critical to ensure the startup remains a viable business. It also is hoping a targeted IPO (initial public offering) next year will generate the funds needed to grow its user base and service portfolio.
Ryde had spent the past year sharpening its strategy on its home market after it realised focus was essential to ensure its sustainability, said the company’s CEO and founder Terence Zou, who spoke to ZDNet in a video interview. Established in 2014, the startup has processed 16 million bookings since its inception, with its app clocking 700,000 downloads. Launched as a carpooling app, it now also facilitates private-hire and taxi booking services.
Zou said his team spent time in 2019 running trials in Hong Kong, Kuala Lumpur, and Sydney, so it could better understand some of the markets in the region. In the Malaysian capital city, for instance, it had offered its platform for free to drivers–without imposing a commission fee–so users would try the service and it could gather and assess feedback, he noted.
Then the global pandemic swept in last year and Ryde decided to focus its efforts at home. Zou said: “We don’t have unlimited resources so we made the decision to focus our growth in Singapore, which has proven to be the right strategy.”
He said the startup was profitable for the first time in the fourth quarter of 2020 and its Gross Transaction Value grew close to four-fold since the start of the COVID-19 pandemic. He declined to reveal how many rides it transacted a month.
He believes one of Ryde’s key competitive advantage is its lower fees, where it charges a 10% commission compared to the market average of 20% to 25%. This meant that for every $10 drivers made, they would take home $9.
It had helped Ryde grow its driver network amidst a more difficult economic climate, where its competitors had stopped giving out subsidies to attract drivers to their platform. There currently are more than 10,000 drivers actively using its platform each month.
Zou added that drivers on his network did not need to adhere to rigid contracts that tied them to use only Ryde’s fleet. “We run an open system where any carpool, private driver or taxi driver is welcomed to join us, subject to our verification processes,” he said. “We also don’t give preferential treatment, which is what some of the other players do. We offer a fairer system where drivers are not forced to take a job.”
The startup now is aiming to grab 30% of Singapore’s ride-sharing market by 2023, which means it will be targeting to claim some share from major players Grab and Gojek.
It planned to do this by pushing out new services, adding to an existing portfolio that includes RydePet, RydeHire, and RydeFlash. Last year, it introduced parcel delivery service RydeSend in beta, which enabled customers to send a package within 50 minutes.
Last June, it also began allowing users to pay with Bitcoin and would monitor demand to determine if other cryptocurrency should be added as a payment option, Zou said. He declined to reveal the takeup rate of Bitcoin on its platform, but said it was seeing some public interest.
It recently launched Ryde for Business, a service that enabled organisations and employees to manage their travel expenses more easily. Trips, for instance, categorised as business could be automatically consolidated and sent to the user’s business email, which then could be forwarded to HR for reimbursement.
Bigger plans, though, are in store for 2022 when the startup plans to launch its IPO on the Singapore Exchange (SGX). It is targeting a valuation of SG$200 million on Catalist, which is SGX’s listing platform for fast-growing local companies.
Zou said an iPO would provide opportunities to grow its user base as well as build its brand and credibility as a startup. The funds also could facilitate Ryde’s potential foray into fintech services and drive an expansion into the Southeast Asian region, he said. “We’re still collecting important data on the viability of those [regional] markets [where trials were held]. We’re a technology platform, so we don’t need to have local offices to launch our service there,” he said.
In addition, funds from an IPO would enable the startup to further enhance its current service. For example, RydeSend fees could be reduced if drivers were able to make multiple stops and dropoffs. Data analytics and machine learning technologies also would be applied to help the company track demand and tweak its workflow accordingly.
Zou said: “We will continue to lower lower prices and lower commission fees. Selling a service cheaper will be the competitive advantage. We just need to keep doing what we’re doing well.”
Adding more services on the Ryde platform also would help fuel demand for its drivers, which meant more income for the latter and this would create overall stickiness for the platform, he said.
According to Zou, Ryde plans to make 100 new hires over the next three years, with roles in engineering, design, operations, and digital marketing. The company’s current headcount is fewer than 50.
