I.

Company Overview

Grab is a start-up company established in 2012 at Kuala Lumpur, Malaysia. It

developed Grab app (before MyTeksi or GrabTaxi app), which is now the leading

ride-hailing app in Southeast Asia (with over 50 million downloads as of June

2017). Grab (as a platform) is a mobile application that assigns available cabs

nearby to commuters using mapping and location-sharing technology. It has been

solving critical transportation challenges and been making transport freedom a

reality for 620 million people from 113 cities in Southeast Asia.

Being the pioneer of commuting alternatives for drivers and passengers, it

currently offers services (with emphasis on speed, safety and reliability) in

Singapore, Indonesia, Philippines, Malaysia, Thailand, Myanmar and Vietnam.

A. Brief History: ‘A Southeast Asian Journey’

As it is common with Southeast Asians, ideas come out over chats and

rants about what’s happening around. It was in 2011, Mr. Anthony Tan, Ms.

Tan Hooi Ling (co-founders of Grab) and some other friends were enjoying

some tea together and started to exchange rants about how hard it was to

get a taxi in Malaysia. Anthony Tan shared his worries on letting his fiancée

rode a taxi alone while Hooi Ling shared her mother’s safety concerns for her

whenever she travelled at night to their house. But afterwards, they did

something uncommon when they decided to solve the problem and stop from

just ranting about it. Tan drew up a business plan for an Uber-like service

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 that won backing from angel investors. Tan pitched the idea to the panel of

the 2011 Harvard Business Plan Competition, that led to them second placer,

making them the first all-Asian team to have succeeded in many years.

The legend had it and Grab was launched as MyTeksi at Kuala Lumpur,

Malaysia in June 2012, initially offering 11,000 rides. But, the demand rise to

1000% which made their simple goal transformed into something bigger,

which is to make Southeast Asia a better place.

Now, with more than 930,000 driver-partners in seven countries, it

offers 2.5 million rides daily, according to the company’s five-year report

entitled, ‘Moving SEA Together’.

B. Vision: ‘Driving South East Asia Forward’

Grab believes that one day soon, every single person in Southeast Asia

will be able to travel safely, comfortably, and easily to work, to college, and to

tea with a few friends.

C. Mission: ‘To be the driving force of freedom’

Grab is committed to be the driving force of freedom: the freedom to get

to destinations safely and conveniently; the freedom to take the best

transport choices; and the freedom to pursue a rewarding livelihood.

D. Goals: ‘Forward Together, but in what way?’

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 Grab has always tried to solve real world transportation problems. But

even from the very beginning, just finding the solution is not enough and

bringing them to life, requires more. And this is why Grab is guided to fulfil

the following goals:

1. To provide the safest transport platform. Travel with confidence

knowing grab’s priority is your safety.

2. To make transportation accessible to all. Grab offers best transport

options at various price points.

3. To improve lives of our partners. Grab improves the lives of

passengers, drivers, employees and society at a large.

E. Services Offered

Grab used localized approached to offer payments and a range of

transport services to different locations across SEA through one app. These

services include:

1. Taxi-Hailing/GrabTaxi - a smartphone-based taxi booking and

dispatching service.

2. Private Car/GrabCar/GrabCar+ - a car-booking app that revolutionizes

the way you move by sending a private vehicle along your way at the

tap of a button. GrabCar will take you where you want to go in

chauffeur-style service.

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 3. Carpooling/Grabshare - an on-demand carpooling service that allows

you to share your ride with other passengers headed in the same

direction.

4. Delivery/GrabExpress - a premium delivery service that provides

convenience to customers. By booking on the app, you can send items

such as documents, parcels, and gifts to your business partners or

loved ones.

II. Controversies and Challenges vis a vis Company’s Response to the

Situation

As Grab’s business continuously grows, the scale of problems grows with it.

Grab has been an active contributor to solving Southeast Asia’s fundamental

issues: congestion, jobs, trust in and access to the digital economy. These issues

affect SEA’s long-term economic growth and Grab is still very much committed to

investing in our region. Nevertheless, certain elements seemed hard to be

controlled in the case of Grab Philippines. After 4 years of operation in the country,

the government started to eye on a strict implementation of its long-time kept

memorandum. That brings this paper into discussion of issue and challenges

pertaining to corporate governance practices of Grab Philippines.

A. Grab Philippines on Allowing Driver-Partners to Still Operate with No

Permits or Expired Permits

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 In the Philippines (supposedly the first country to legalize ride-sharing),

the local supply of driver-partners continue to be constrained after the

government stopped issuing permits to cars that have signed up on the ride-

sharing bandwagon. On July 21, 2016, the Land Transportation

Franchising and Regulatory Board (LTFRB) released Memorandum

Circular 2016-008, which suspends the acceptance and processing of

applications for Grab and its competing ride-sharing services. The order

essentially stopped the release of temporary permits to Grab vehicles while

the LTFRB further studied how to regulate the growing industry.

On July 11, 2017 the LTFRB ordered Grab to pay a fine of Php 5 million

for letting drivers with no permits or expired permits to still operate on their

platforms. Grab admitted that they accepted new drivers despite the LTFRB's

earlier order, citing strong passenger demand as their reason. In fact, Grab

Philippines Country Manager, Brian P. Cu admits to some negligence in the

faithful and strict compliance with government rules, but also claims “all was

done in the spirit of competition” and “in the spirit of earnings for our Grab

partners.” Grab further said that about 80% of their active drivers don't have a

Provisional Authority (PA) or Certificate for Public Convenience (CPC)

franchise.

After Grab had complied to pay the hefty fine, the LTFRB also ordered

them to clear out unregistered drivers by July 26 or face more fines, but Grab

filed motions for reconsideration. The LTFRB later agreed not to apprehend

unregistered transport network vehicle services (TNVS) until it decides on the

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 appeal but also ordered Grab to submit to the agency its list of drivers as of

June 30 to help it determine the exact number of its app-based drivers. Grab

immediately complied with a soft copy.

B. Emphasis on Grab’s Immediate Actions to the Challenges on the Pillars

of Corporate Governance

Challenges on the Pillars of Grab's Stand on the

Corporate Governance Situation/Immediate Action(s) Made

Brian P. Cu and Grab stand responsible

and accountable to their decision through

admission of their negligence on the strict

and faithful compliance with the

Accountability
memorandum released by LTFRB. He

explained and clarified that “all was done

in the spirit of competition” and “in the

spirit of earnings for our Grab partners.”

Grab immediately complied with LTFRB's

order to submit list of accredited

Transport Network Vehicle Services. Grab

Transparency
stand to be transparent with its operation

as it immediately disclosed a part of their

operations information to LTFRB.

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 Grab paid P5 million as fine for allowing

their drivers to work in Metro Manila

despite their lack of permits. Grab stand

Responsibility efficient on immediately performing its

legal responsibilities to the governing

agency - LTFRB and to its stakeholders -

Grab Partners.

Grab filed motions for reconsideration that

lifted the apprehension of all unregistered

transport network vehicle services

Equitable Treatment (TNVS). Grab stand fair as it just not act

for the benefit of its own accredited

partners but also for the benefit of all

TNVS even those from its competitors.

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III. Strengths and Weakness Analysis

Grab's Stand on the Strengths Weaknesses

Situation/Immediate Action(s)

Made

Brian P. Cu and Grab stand Grab's strength on accountability Being accountable with its

responsible and accountable to lies on its capability to admit partners doesn't give them the

their decision through admission of mistakes and standing firm on license to violate the law or any

their negligence on the strict and what they value - their partners. order. Accountability thrives

faithful compliance with the from being responsible to

memorandum released by LTFRB. decisions for both partners and

He explained and clarified that “all other key members of the

was done in the spirit of society which includes the

competition” and “in the spirit of government.

earnings for our Grab partners.”

Grab immediately complied with Grab's immediate response to Grab's weakness is its failure to

LTFRB's order to submit list of the order of its governing body is publicly identify its accredited

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accredited Transport Network one of its primary strengths when partners to its riders, who

Vehicle Services. Grab stand to be it comes to transparency. happen to be their stakeholder.

transparent with its operation as it

immediately disclosed their

operations information to LTFRB.

Grab paid P5 million as fine for Grab's compliance and positive Grab being fined makes it weak

allowing their drivers to work in response to the consequences of in the first place. They wouldn't

Metro Manila despite their lack of its negligence to the have been fined if they are

permits. Grab stand efficient on memorandum is its strength in carefully performing what is

immediately performing its legal achieving its efficient ought to be legal.

responsibilities to the governing performance of duty to its

agency - LTFRB and to its stakeholders.

stakeholders - Grab Partners.

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Grab filed motions for Grab's strength on the context of Grab's weakness in terms of

reconsideration that lifted the equitable treatment is mirrored this situation is its uncertainty

apprehension of all unregistered on its aim to drive forward on until when such motion for

transport network vehicle services together. Grab could have just reconsideration will last.

(TNVS). Grab stand fair as it just followed LTFRB's order to clear

not act for the benefit of its own out unregistered TNVS, but

accredited partners but also for the instead they valued what will be

benefit of all TNVS even those beneficial to all its stakeholders,

from its competitors. that is to provide a continuous

service for all.

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IV. Conclusion

No company, whether just a start-up nor an established one can skip the

challenges brought by the pillars of corporate governance. Grab, being one of

those start-ups has gone through it and will go through it. But there is always

something good about taking those challenges, that is to evaluate one’s

performance and know what was hit and missed.

V. Recommendation(s)

With the challenges faced by Grab from the essential pillars of corporate

governance, here are some of recommendations/reforms that could be performed

to become more ethically and socially responsible:

1. Reform the business model by incorporating LTFRB's memorandum. This

could be something done during the planning stage of the business. If done

beforehand, it could have succeeded the challenge on legal constraints, fines

and apprehensions.

2. Disclose important information as to whether the driver-partner has been

awarded of a permit to operate to the public. Grab should also suspend those

who were not awarded with the permit. This will not only show the company's

transparency but also its equitable treatment/fairness to all its stakeholders.

3. Work hand in hand with the government in identifying how the industry can

help solve the problems on congestion, safety and trust issues among

commuters, drivers and investors.

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VI. References

http://www.bworldonline.com/content.php?section=Corporate&title=grab-stays-on-

course-sets-goal-beyond-ride-hailing&id=146626

https://www.digitalnewsasia.com/business/grab-turns-5-celebrates-user-

milestones

https://www.grab.com/my/press/business/grab-turns-five/

http://cnnphilippines.com/news/2017/07/17/ltfrb-orders-grab-uber-to-submit-list-of-

accredited-operators.html

http://news.mb.com.ph/2017/07/28/grab-uber-told-to-delist-members-accredited-

after-june-30/

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