More Tips, More Late-Night Orders, More Burgers: How the Pandemic Changed Grab's Operations in the Philippines
After the government temporarily prohibited the operations of transport network vehicle services in March to contain the spread of COVID-19, Grab had to act fast. Transport is one of the key consumer services of the region’s so-called “super-app,” and while the company has since diversified its offerings into multiple verticals—financial services, hotel bookings, food and grocery delivery, among other things—ride-hailing is how Grab started and, presumably, its cash cow. How would it survive with public transport halted? And perhaps more importantly, how would its driver-partners deal with the instant loss of their livelihood?
The company’s answer was to pivot its operations to concentrate on its verticals that were allowed—like food and package delivery. And, as it turned out, these were services that saw a significant surge during the height of the government’s lockdown orders.
“Grab acted nimbly to adapt to the ever-changing needs of many Filipinos,” a Grab Philippines spokesperson told Esquire Philippines. “As many GrabCar drivers are unable to ply the roads following the suspension of public transportation, we offered our GrabCar driver-partners the opportunity to transition to GrabFood, GrabMart, or GrabExpress delivery-partners.”
Nearly 150,000 of GrabCar driver-partners across Southeast Asia transitioned to becoming delivery-partners since the start of the pandemic, allowing them to keep earning during these unprecedented times. According to the company, the average delivery partner on GrabFood and GrabExpress can earn as much as 40 percent or more above minimum wage, depending on how many hours they drive and which days of the week.
Millions of pesos a week on tips
A significant feature that Grab launched during the early days of the lockdown period was tipping, which allowed customers to show their appreciation to delivery-partners in a very real, concrete way.
“Across the region, the average tip value doubled, with the highest growth recorded in the Philippines at 209 percent!” Grab said. “Every week, millions of pesos are paid out in tips by customers through the app, which goes entirely to our delivery-partners.”
Other features Grab rolled out during this period were GrabFood’s Long Distance Delivery (allowing customers to order from merchants that were previously unavailabale due to distance), the resumption of 24/7 operations, and the launch of GrabMart, an on-demand delivery service for everyday goods like groceries, medicine, gifts, and other essentials.
As expected, because a vast majority of Filipinos in Metro Manila and the rest of Luzon were obeying orders to stay indoors, demand for Grab’s delivery service grew at an unprecedented pace, especially during the past few months of quarantine. Although the company did not disclose specifics, it says demand volumes across all its delivery verticals, including both GrabFood and GrabExpress, hit new highs of up to two or three times pre-COVID levels.
Asked about specific dining habits during this time, Grab revealed a shift in what Filipinos ordered the most. Burgers, apparently, dislodged milk tea to become the number one food category, closely followed by chicken and pizza. Milk tea fell to third place, with sweets bringing up the rear.
“Over 52 percent of orders come in during peak hours (lunch and dinner), but with GrabFood resuming its 24/7 operations last September, we've seen a steady increase in late-night orders, too,” Grab said.
Key trends in the near-term
Clearly the habits that we’ve formed during this crazy year won’t go away so easily, even after a vaccine finally gets here and the threat of contracting the disease is significantly diminished. Like it or not, how we spend our days moving forward—eating, working, socializing—has changed and will likely not go back exactly the way they were, at least not in the near-term.
Grab acknowledges this reality and shared its outlook of the year ahead in four key areas:
- “The heightened awareness around hygiene and sanitation will likely be the most permanent change that arises from the COVID-19 pandemic,” the company said. “Consumers are likely to remain cautious about venturing out even after the lockdowns end given the worries of a second wave of infection. When they do, they will seek to reduce their risk of exposure to infection. They will likely prioritize F&B outlets and stores that have stringent hygiene standards and may opt for modes of transportation that are perceived to lower their risk of exposure.
- “Social distancing will continue to be a norm—even as our economy reopens.”
- “Filipinos will likely continue to rely on digital channels to consume services, entertainment, and even remote work. Demand for digital services and deliveries will remain elevated.”
- “Businesses will move to be digital-first. And those that are not online, will need to digitalize to survive.”
What’s ahead for Grab
As a company that has gotten used to the fickle nature of its business, Grab has already laid out plans that have undeniably been impacted by the health crisis.
“We continue to put safety at the top of our list of priorities, through programs like Safer Meals Philippines and GrabProtect, which sets higher safety standards and gives a continuous education for our partners,” Grab said. “To address the new normal’s high demand for delivery services, cashless payments, and digital channels, we will continue to scale up our services through new and upgraded services and even programs to support our merchant and delivery-partners.”
The company also revealed new features and initiatives geared toward its merchant-partners in 2021, including its Small Business Booster Program, which aims to facilitate the digitalization of small businesses by providing them with the necessary tools and insights.
On the customer side, the effort to make the GrabFood experience even more convenient continues. It also intends to expand its GrabKitchen—the cloud kitchen launched earlier this year in Glorietta, Makati City.
“Although we face a long road to recovery, with the support of our customers and partners, Grab will continue to be every Filipino's partner in addressing the needs of this ‘new normal.’”