Business & Economy Startups On Grab’s phantom bookings: A call to focus on passengers and drivers

On Grab’s phantom bookings: A call to focus on passengers and drivers




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In this kind of high stakes environment, many companies are often willing to do whatever it takes to succeed, and the public just as often turns a blind eye toward their actions

When Uber’s head of business Emil Michael suggested that the company could go through the trash of critical journalists to dig up dirt on them — naming PandoDaily editor Sarah Lacy as a likely target — there was an appropriate uproar in the tech world. Pundits used the opportunity to unleash broader criticism of the ride-hailing giant’s business practices, and some users publicly vowed to delete their Uber app.

Michael, of course, would eventually apologize for what he had said, but the moment was revealing: Even in the ultra-competitive transportation space, there is still a line that people want businesses to follow, and Uber had crossed it.

The line that distinguishes between legitimate business practices and unethical behavior is hazier than the above incident may make it seem. The stakes are immense, after all, in the ride-hailing industry — it’s the high rollers table at the casino. Billions of dollars of venture capital are flowing into the space. There’s a war for market share in every city, state, and country that has roads to ride. And the space itself may be a gateway to other lucrative markets, as we have witnessed in Indonesia with Go-Jek branching out into everything from food delivery and digital payments to on-demand massages and e-health.

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In this kind of high stakes environment, many companies are often willing to do whatever it takes to succeed, and the public just as often turns a blind eye toward their actions, chalking it up to entrepreneurial ambition.

But there is a line, and it’s important for us as a community to demarcate it, as recent news from Singapore illustrates. On June 28, 2018, ride-hailing platform Ryde announced that it had been hit by over 2,000 phantom bookings from 300 fake accounts, a loss representing S$50,000 for the company and its drivers.

The overwhelming evidence points to the IP addresses of Grab as the source of these fake accounts, and if you understand the impact on Ryde’s overall business, you can start to see why they would want to create fake bookings. Outside the direct loss of the S$50,000, Ryde’s drivers waste time and money going to a pick-up location for passengers that will never come, and they ultimately become wary about accepting trips on Ryde. In response to the phantom bookings, Ryde has filed a police report and also notified the relevant authorities, most notably the Competition and Consumer Commission of Singapore (CCCS).

Also read: As a founder, you need to spend time with your most difficult users

Grab, for their part, has said they are investigating the reports. These official statements may make it seem as though Grab may have a few rogue employees who created the phantom bookings, but this could not further from the truth.

How do I know? Our taxi-hailing platform, Micab, which competes directly with Grab’s GrabTaxi and indirectly with their private car hailing services, has also been hit with a firestorm of phantom bookings, albeit with a slightly different modus operandi: After booking one of our cabs, then waiting as usual before canceling, our drivers will receive a call a few minutes later inviting them to a driver’s orientation for Grab.

If this occurred one or two times, you could easily dismiss it to coincidence — perhaps Grab obtained the driver’s number through some under means — but it’s happened several thousand times. The prepaid phone numbers that call our drivers are also sequential, suggesting they were purchased by a single entity at one time.

That Ryde experienced phantom bookings in Singapore, and we are experiencing phantom bookings in the Philippines, suggests a company-wide practice in action, if proven true (in addition to our own investigation, we are submitting our findings to relevant authorities like Ryde): Grab believes it’s fair business practice to create dummy accounts, lure drivers to locations where no passenger will ever come, waste their time and money, and even jeopardise their safety as they idle at pick-up points, all in the name of competition.

Grab’s tactics may be somewhat understandable if they were the scrappy upstart, but they’re not. Due to their merging with Uber in Southeast Asia, Grab is facing investigations for anti-competitive and antitrust behavior in nearly every market it operates in. In other words, Grab is the 800-pound gorilla in the room, and like Microsoft in the late 1990s, it looks like it is willing to do anything, even skirt the lines of ethical behavior, to keep its market share. The very reason it can invest man-hours into these fake accounts and phantom bookings is precisely because it is so large.

Also read: Singapore watchdog says Grab-Uber merger is anti-competitive and may unwind it

I write this op-ed not as a way to shame Grab, but as a call to everyone in the ride-hailing space across Southeast Asia. Even if our products may differ, we all entered into this arena for the same reason: We want to provide a better solution for our region’s passengers and drivers. We need to keep that mission in mind as we try to grow our businesses: The line between legitimate business practices and unethical behavior is the point at which we negatively impact even a single passenger or driver on our own accord.


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Photo by DESIGNECOLOGIST on Unsplash

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