When it comes to carpooling in Southeast Asia, Grab and Gojek come first.
While Grab and Gojek are diligently expanding their business empires in the region, there are other actors working out their own corners in this sector.
Ryde Technologies, based in Singapore, is one of them. The startup is building a profitable business and remains true to its commitment to designing efficient mobility solutions in the city-state.
Ryde was founded in 2014 by Terence Zou and was a pioneer in digital carpooling in Singapore two years before Grab launched a similar service, GrabHitch.
Fast forward to 2020. Ryde raised $ 9.5 million from several investors, including Shopee's parent company Sea Group, which led two rounds of Ryde financing in 2016 and 2017.
The beginnings of Ryde
Ryde founder Terence Zou / Photo credit: Ryde
Ryde is Zou's first entrepreneurial company after working in finance and investment for almost ten years.
The idea for this company came when Zou was tired of how difficult it was to stop an empty taxi in the busier areas of Singapore.
At that time there were about 30,000 taxis and 500,000 private cars in Singapore. Carpooling would be the most efficient way for people to get from point to point at half the price of the taxi, and they could help solve the problem of traffic congestion and pollution in the city.
The idea (carpooling) has been around for some time in many Southeast Asian countries, including Singapore and Malaysia, where the government has been trying to promote it since the 1970s. But nobody made it because the technology wasn't enough at the time and there were no smartphone and digital payment options. These two things are important for carpooling to work.
– Terence Zou, founder of Ryde
Times have changed and the requirements that Zou has defined are commonplace today. All it took was the right people to tie them together, and many tried.
But when Grab dominated in Singapore in November 2018 and Gojek came into the picture, there was doubt that more humble players like Ryde could survive.
Ryde's on-demand delivery service RydeSend / Photo credit: Ryde
That didn't stop Zou from staying on course, and Ryde introduced additional services, including a private rental car service, a pet-friendly carpool service called RydePet, and an on-demand courier service RydeSend.
To date, Ryde has enabled five million trips, and its app has been downloaded nearly 700,000 times in Singapore.
Last year, the company had gross merchandise volume of $ 21.5 million and sales of $ 2.15 million.
Although Zou said the startup will continue to focus on Singapore, he is still exploring ways to get Ryde into new markets.
In October 2019, Ryde piloted operations in Kuala Lumpur, Hong Kong and Sydney.
"We experiment with different things. We started limited activities in foreign markets to get data and see how people react to our product. When the time comes, we will push for regional expansion, but we are in no hurry for it, ”said Zou.
How Ryde keeps alive financially
Zou does not see giant companies like Grab and Gojek as direct competitors as Ryde continues to focus on providing mobility solutions, while other operators have diversified their business offerings by entering sectors such as food delivery, financial services and entertainment.
And a small team at Ryde means it can stay slim and inexpensive, making it more resilient to unexpected but devastating events like the COVID-19 pandemic.
The crisis has strengthened my perspective. Despite the market slowdown, our financial situation is stronger than ever.
When a lot of companies have to fire their employees, we were careful because we didn't hire too much beforehand. Our main focus now is on working towards profitability.
– Terence Zou, founder of Ryde
Even so, Ryde was not immune to the business slowdown caused by the pandemic.
The Singapore government suspended carpooling from April 7 to June 19 to reduce the likelihood of the disease spreading further in the city-state.
But just like its larger competitors, Ryde saw increasing demand for deliveries as people couldn't leave their homes during the breaker period. RydeSend orders have increased by 600% and the startup has also made more bookings for private car rentals and taxi rides.
Ryde charges 10% commission from driver partners, half that from Grab. There is no rental car program, so drivers who sign up do not have to worry about others being given preferential treatment.
The lower setting results from the way the company manages its money. Zou said Ryde didn't spend much on marketing and advertising to keep the company going, despite having a relatively small market share.
"The business is very simple. We have no assets or inventory. We only offer a platform that brings drivers and passengers together. We receive a 10% commission on every transaction so we can offer a lower price than other operators."
"You won't find us on a billboard either, since 70% of our customers come from recommendations. The strategy of keeping our costs down helps us stay agile in the fight against the giants. Although we are small, we can be sustainable and organic grow, ”said Zou, stating that Ryde plans to increase profitability this year.
Ryde is also ready to receive a license for a hail service provider under Singapore's new transportation legal framework, which will enter into force in October.
The new rules prohibit operators from forcing drivers to make exclusive offers. This means that drivers can provide services on multiple platforms, leaving additional income channels open for them.
The startup plans to raise approximately $ 7.16 million in its current investment round, which is headed by the Singapore-based Octava family office and is expected to be completed in the third quarter of this year, Zou said.
Ryde will use the new capital to drive digital marketing and explore new mobility-related industries.
Jump on the crypto bandwagon
As one of the first online carpooling companies in Singapore, Ryde is also the first platform in the world where users can pay for Bitcoin rides.
This option went live on June 22. RydePay's e-wallet allows users to convert their bitcoins to RydeCoins at market prices to pay for travel without transaction costs.
Ryde's Bitcoin wallet / Photo credit: Ryde Technologies
Cryptocurrency crosses borders, there is no government intervention, and it is executed in its own ledger, which is blockchain technology.
I believe that cryptocurrency as a payment method will gradually gain market share and we want to be the first to offer this service.
– Terence Zou, founder of Ryde
With this new offer, Ryde wants to reach a new customer group.
Zou believes that many people in Singapore are already familiar with and own bitcoins, but there are few companies that accept this as a form of payment.
"As a ride-hail platform, we have a huge transaction volume, so we can be thought leaders so that Bitcoin and cryptocurrency become mainstream."
Zou also believes that the pandemic is pushing people to be cash averse and use digital payments instead, which allows cryptocurrencies to be put to practical use.
Ryde may launch Ethereum as an additional payment option over the next nine months.
This article is part of the KrASIA “Startup Stories” series, in which the authors of KrASIA speak to founders of technology companies in South and Southeast Asia.
Selected image source: The Star / Ryde