Emerging Trends | SMEs/Entrepreneurship
May 18, 2016

Grab’s proactive approach to regulatory affairs

By Nina Teng

Innovation is often associated with disruption when new ways of operating upset the status quo. Consequently, the timing of policy and regulation needs to be carefully aligned with the pace of innovation and growth. As such, governments are increasingly embarking on consultations with private businesses and other stakeholders when introducing or reviewing innovation policies that seek to support the domestic information and communication technology (ICT) sector and increase their competitiveness in the global digital economy. But ICT startups often view government actions as complicating their efforts to move quickly to scale their businesses in a cost-effective manner.

Grab, a Southeast Asia-based ride-hailing company, has worked preemptively with governments to help create balanced polices to support the local transport app industry. In doing so, Grab has cultivated a mutually beneficial relationship: Grab equips regulators with industry insights, ensuring that policymaking can occur in a timely manner. This approach has helped the company experience a period of rapid growth and expand into six new markets across Southeast Asia, showing that maintaining a positive relationship with government policy makers and regulators can and does pay off.

ITU caught up with Grab VP for Public Affairs, Nina Teng, at the recent Seedstars Summit in Lausanne, Switzerland, to discuss the company’s approach of working with government policymakers and regulators from the outset. Below is an excerpted version of an email Q&A between Grab and ITU.

ITU: What are some specific examples of how you sought to pre-emptively work with regulatory authorities in ways that many startups don’t?

Grab: Grab believes that the most effective solutions to social problems are those that are based on evidence. With this in mind, Grab has pioneered initiatives to equip regulators with the insights they need in order to make sound decisions with respect to ride-hailing policy.

For example, Grab has launched an exclusive policy partnership with the Vietnam government to pilot GrabCar over a two-year period. The pilot will enable the Vietnam government to test a regulatory framework for the ride-hailing industry in Vietnam. This innovative approach to policymaking will result in policies that are based on reliable evidence.

Grab has also worked with governments on social impact partnerships. Such partnerships have enabled governments to explore the potential of Grab’s business model to solve social problems or other public policy challenges. For example, Grab recently launched an exclusive partnership with the World Bank to provide an open-source smart data platform, OpenTraffic, free of cost to governments in Southeast Asia. The OpenTraffic platform converts real-time GPS data generated by Grab’s driver application into real-time traffic congestion, journey time and travel speed information. Governments can use OpenTraffic to improve road safety and alleviate traffic jams in their cities. The Philippines OpenTraffic pilot was recently launched (in collaboration) by Grab, the World Bank, the Philippines Department of Transportation and Communications and associated Philippines government agencies.

Since Grab’s booking platform offers a range of transportation options in the single app, Grab has a deep understanding of and relationship with a range of transportation markets (including taxis, private hire cars and, in some countries, motorcycle taxis). This places Grab in a unique position to offer insights into creating policies that benefit drivers and passengers in all markets, in a balanced manner.

ITU: Why did you choose that approach? What have been the benefits?

Grab: Grab’s approach is driven by the company’s social mission to improve the lives of its passengers and drivers, to improve accessibility of transportation and to provide a safe transportation platform. Grab believes that public policy plays an important role in enabling social businesses such as Grab to scale their social impact to a city or national level. Grab believes that its approach of working collaboratively with governments from the outset results in strong public policy that is aligned with Grab’s social mission and benefits its drivers and passengers.

To illustrate, Grab provided input to the Philippines Department of Transportation and Communications (DOTC) and the Philippines Land Transportation Franchising and Regulatory Board (LTFRB) on, amongst other things, the specific measures that should be mandated in order to ensure that the transport app industry operates at the highest standard of safety. As a result, the regulations include robust, tailored safety requirements.

ITU: Have there been any drawbacks to that approach? Such as?

Grab: This approach has been an overall positive one. Grab has been able to minimise drawbacks by developing a trusting relationship with its government counterparts; a relationship based on a neat alignment between the goal of government and the goal of Grab to solve social problems in Southeast Asia.

ITU: Can you share with us details of your counterpart at one of the local regulatory agencies (maybe the Philippines) with whom you worked, and who could share the ‘other side’ of the story?

Grab: In 2015, the Philippines became the first country to issue national regulations for ride-sharing. GrabCar and GrabTaxi became the first services to be registered and to operate legally under those regulations.

Grab collaborated closely with the DOTC and LTFRB in the policymaking process, by offering public support for the policy and providing thought leadership on ridesharing policy. Understanding that the process of crafting sound regulation takes time and consideration, Grab did not use aggressive tactics to pressure government into regulating. This collaborative effort contributed to the overall positive reaction of the public and the incumbent industry, to the regulations.

In a public statement, the (then) LTFRB Executive Director Atty. Roberto Cabrera noted:

“GrabCar has been very collaborative. Since day one of operations, they have been working closely with us to ensure that the policy on TNCs prioritizes passenger safety. We are happy to announce that GrabCar has already been accredited upon meeting all government requirements, and we are positive that this will revolutionize the Philippine transportation industry.”

Nina Teng
Nina Teng is Vice President, Public Affairs- ASEAN at Grab. She leads government affairs and social impact initiatives at GrabTaxi, a for-profit social startup that improves the lives of taxi drivers and passengers. Previously, she was Fellow Associate at Malaysia Blue Ocean Strategy Institute and Training Institute Director at Teach for Malaysia.
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Grab’s proactive approach to regulatory affairs

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