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What Makes Uber Tick in Malaysia?
Insights into the consumer preferences and behavior
31 May 2016
2
Table of Contents
Section Slide Number
A. Snapshot of Key Findings and Executive Summary 03
B. Uber in Malaysia: An Introduction 08
C. Findings from Frost & Sullivan Survey
C1. Profile of Respondents 12
C2. Usage of Uber 13
C3. Satisfaction with Uber 17
C4. Service Improvements 18
C5. Competition 19
C6. Reasons for Not Using Uber 20
D. Key Takeaways 22
3
Snapshot of Key Findings
www.presentationmagazine.com
4
Executive Summary (1/3)
Frost & Sullivan conducted a survey to gauge the preferences and usage patterns of consumers
in Malaysia. Various segments were included in the sample mix
In Malaysia, Uber offers three options (uberX, uberXL and UberBLACK). The options differ in
terms of fare as well as size/type of vehicles
Uber‟s fare includes a base fare and fares based on time & distance. The fare is lower than local
taxis in Malaysia and is usually lesser than GrabCar
Uber has around 60,000 drivers in Malaysia and plans to add another 100,000 in 2016
Out of the total respondents, 79% indicated that they use Uber. The frequency of usage ranges
from low (1-2 times a month) to very high (i.e., everyday)
1
2
3
4
5
Out of the 21% respondents, who indicated that they never use Uber, 75% own a vehicle 6
5
Executive Summary (2/3)
30% interviewed Uber users indicated that they use it as their primary mode of transportation. In
case of users who own a vehicle, 14% use it as primary mode
Interestingly, 78% respondents who own a vehicle still use Uber. Usage among 57% non-vehicle
owners is „High‟ or „Very High‟
Lower fares, poor public transport infrastructure, and presence of better vehicles (in Uber)
compared to local taxis are the main reasons for the uptake of Uber
72% interviewed expats indicated that they use Uber. 51% expats have „High‟ (3-5 times a week)
or „Very High‟ (everyday) usage
Out of respondents who own vehicle and use Uber, 86% use it on weekdays and/or weekends.
Around 10% use it only on weekends
7
8
9
10
11
85% Uber users are happy with the services, where as 11% indicated that they are unhappy 12
6
Executive Summary (3/3)
A large portion of Uber riders use other services as well. MyTeksi is a popular option
Reasons cited by users who are unhappy with Uber include timeliness (“sometimes drivers take too
long to arrive”), difficulty in finding vehicles, surge pricing, and poor navigation system
41% interviewed Uber users said that surge pricing should be stopped, 33% suggested that it
should be reduced and 30% suggested instead of surge pricing, there should be user-defined tip
63% interviewed users have suggested that Uber should increase coverage to more cities; 59%
have suggested to improve the time taken by drivers to arrive
Some respondents indicated that they do not trust Uber drivers in terms of finding the shortest/
fastest route. Hence, if they are in a hurry, they opt for local taxis (typically through MyTeksi)
13
14
15
16
17
21% respondents indicated that they do not use Uber. The primary reason is that they prefer
using their own vehicles as it offers more convenience 18
7
Table of Contents
Section Slide Number
A. Snapshot of Key Findings and Executive Summary 03
B. Uber in Malaysia: An Introduction 08
C. Findings from Frost & Sullivan Survey
C1. Profile of Respondents 12
C2. Usage of Uber 13
C3. Satisfaction with Uber 17
C4. Service Improvements 18
C5. Competition 19
C6. Reasons for Not Using Uber 20
D. Key Takeaways 22
8
In Malaysia, Uber offers three options (uberX, uberXL and UberBLACK). The
options differ in terms of fare as well as size/type of vehicles
Uber in Malaysia: Offerings
Source: Frost & Sullivan Analysis; The Star Online; Note: All trademarks, icons & logos are acknowledged as the property of their respective owners. Frost & Sullivan does not claim
ownership of them;
uberX uberXL UberBLACK
Low cost
Small vehicles (typically
hatchbacks or economy
sedans)
Suitable for individuals,
couples
Medium cost
Spacious vehicles (typically
MPVs)
Suitable for small families or
people with luggage
High cost
Premium cars
Suitable for individuals, groups
or families looking for luxury
and style
Uber in Malaysia: An Introduction
Uber has around 60,000 drivers in Malaysia and plans to add another 100,000 in 2016
9
Rider makes the booking through a mobile application. The ride is cashless
Uber in Malaysia: How it works?
Source: Frost & Sullivan Analysis; Note: All trademarks, icons & logos are acknowledged as the property of their respective owners. Frost & Sullivan does not claim ownership of them;
Step 1: Rider uses the Uber mobile application to make the booking
Selects the preferred Uber service (uberX, uberXL, UberBLACK)
Indicates the pick-up point as well as destination
Inserts note for the driver (if any) – for example, the exact pick-up location
Step 2: Driver arrives; rider gets into the car and the driver slides the „Start Trip‟ bar in his/her application
Step 3: After arriving at the destination, driver slides the „Complete Trip‟ bar in his/her application and passenger gets
off the vehicle
Step 4: Rider‟s credit card (details are inserted at the time of the registration) is charged. The charge includes the
fare as well as toll charges (if any). The payment is cashless (Note: Uber is going to offer a cash payment option as
well). The rider receives the copy of the receipt through e-mail
Uber in Malaysia: An Introduction
10
Uber‟s fare includes a base fare and fares based on time & distance. The fare
is lower than local taxis in Malaysia and is usually lesser than GrabCar1
Uber in Malaysia: Comparison of Fares
Uber in Malaysia: An Introduction
Source: Frost & Sullivan Analysis; Uber Malaysia Website, Suruhanjaya Pengangkutan Awam Darat (SPAD), Grab Website; 1. Like Uber, GrabCar uses private cars . The company has
another option called „MyTeksi‟, which uses local cabs; 2. First 1 KM or first 3 minutes; 3. For Klang Valley only; 4. The Company website indicates that the minimum fare is zero.
However, since base fare is applicable, a user would have to pay art least the base fare irrespective of the time/distance; Note: All trademarks, icons & logos are acknowledged as the
property of their respective owners. Frost & Sullivan does not claim ownership of them;
S.No Name of the
Operator/Service Base Fare
Charges as per
time (per minute)
Charges based on
distance (per KM)
Minimum
Fare
UBER
1 uberX MYR 0.95 MYR 0.25 MYR 0.60 MYR 0.95
2 uberXL MYR 2.50 MYR 0.40 MYR 0.75 MYR 2.50
3 UberBLACK MYR 3.00 MYR 0.50 MYR 1.40 MYR 5.00
LOCAL TAXI
4 Budget Taxi MYR 3.002,3
MYR 0.29 MYR 0.87 MYR 3.00
5 Premier Taxi MYR 4.002
MYR 0.27 MYR 1.33 MYR 4.00
6 Executive Taxi MYR 6.002
MYR 0.57 MYR 2.00 MYR 6.00
GrabCar1
7 GrabCar Economy MYR 1.00 MYR 0.00 MYR 1.30 MYR 1.004
8 GrabCar+ Premium MYR 4.00 MYR 0.50 MYR 1.50 MYR 15.00
11
Table of Contents
Section Slide Number
A. Snapshot of Key Findings and Executive Summary 03
B. Uber in Malaysia: An Introduction 08
C. Findings from Frost & Sullivan Survey
C1. Profile of Respondents 12
C2. Usage of Uber 13
C3. Satisfaction with Uber 17
C4. Service Improvements 18
C5. Competition 19
C6. Reasons for Not Using Uber 20
D. Key Takeaways 22
12
Frost & Sullivan conducted a survey to gauge preferences and usage patterns
of consumers in Malaysia. Various segments were included in the sample mix
Survey on Uber Usage: Respondent Profile
Source: Frost & Sullivan Analysis; Primary research with Uber users and non-users in Malaysia. Note: The findings in this section are purely based on survey outcome/results
Profile of Respondents
66%
3% 14% 3% 6% 9%
0%
25%
50%
75%
Employed - Full Employed - Part Self Employed Retired Student Housewife
Respondents: Breakdown by Occupation n=140
Respondents: Breakdown by Residential Status Respondents: Breakdown by Car Ownership
60%
11%
29%
0%
25%
50%
75%
Malaysian (ByBirth)
PermanentResident
Expat
77%
23%
0%
20%
40%
60%
80%
Own a Vehicle Do not own a vehicle
n=140 n=140
13
Out of the total respondents, 79% indicated that they use Uber. The frequency
of usage ranges from low (1-2 times a month) to very high (i.e., everyday)
Frequency of Usage of Uber: Overall
Source: Frost & Sullivan Analysis; Primary research with Uber users and non-users in Malaysia. Note: The findings in this section are purely based on survey outcome/results
Usage of Uber
n=140
21%
38%
20%
11% 10%
0%
10%
20%
30%
40%
Never 1-2 times a month 1-2 times per week 3-5 times per week Everyday
Key Takeaways
21% respondents indicated that their usage of Uber is „High‟ (3-5 times a week) or „Very High‟ (Everyday)
Out of the 21% respondents, who indicated that they never use Uber, 75% own a vehicle
It must be noted that Malaysia has very high motorization rate. Large portion of households do own one or few vehicles
(Low) (Medium) (High) (Very High)
14
Interestingly, 78% respondents who own a vehicle still use Uber. Usage among
57% non-vehicle owners is „High‟ or „Very High‟
Frequency of Usage of Uber: Breakdown by Customer Segments
Source: Frost & Sullivan Analysis; Primary research with Uber users and non-users in Malaysia. Note: The findings in this section are purely based on survey outcome/results
Usage of Uber
22%
16%
28%
48%
3%
8%
19%
25%
15%
4%
38%
33%
7%
19% 18%
0%
10%
20%
30%
40%
50%
Vehicle Owners (n=108) Non-Vehicle Owners (n=32) Expats (n=40)
Never 1-2 times a month (Low) 1-2 times per week (Medium) 3-5 times per week (High) Everyday (Very High)
Key Takeaways
Though 78% respondents who own a vehicle use Uber, 48% have low (1-2 times a month) usage frequency
84% respondents, who do not own a vehicle, use Uber
72% interviewed expats indicated that they use Uber. 51% expats have „High‟ (3-5 times a week) or „Very High‟ (Everyday) usage
15
26%
26%
37%
44%
52%
56%
74%
81%
89%
94%
Good Networking Opportunity
Reputed, Reliable, Global Company
Flexibility of Selecting the Type of Car
Receipts through mails
No Hassle of Finding Parking
Polite Drivers compared to Local Cabs
Cashless Payment
Better Cars compared to Local Cabs
Poor Public Transport Infrastructure
Less Costly compared to Local Cabs
0% 10% 20% 30% 40% 50% 60% 70% 80% 90% 100%
Lower cost/fares, poor public transport infrastructure and presence of better
vehicles (in Uber) compared to local taxis are the main reasons for the uptake
Reasons for Use of Uber
Source: Frost & Sullivan Analysis; Primary research with Uber users and non-users in Malaysia. Note: The findings in this section are purely based on survey outcome/results
Reasons for Use of Uber
n=111
Percentage of Respondents
Cashless payment, polite drivers and no hassle of finding parking are the other key reasons
This could be the reason why several
vehicle owners opt for Uber
16
30%
23%
11
37%
14
35%
10
41%
30% interviewed Uber users indicated that they use it as their primary mode of
transportation. In case of users who own a vehicle, 14% use it as primary mode
Uber Usage: How and When is Uber Used?
Source: Frost & Sullivan Analysis; Primary research with Uber users and non-users in Malaysia. Note: The findings in this section are purely based on survey outcome/results
Uber Usage: How and When is Uber Used?
Respondents who use
Uber
Respondents who own
vehicle and use Uber
In %; n=111 In %; n=84
Out of respondents who own vehicle and use Uber, 86% use it on weekdays and/or weekends. 10% use it ONLY on
weekends
37% Uber users and 41% Uber users who own a vehicle do not use Uber as their primary mode of transportation.
Though they still use Uber on weekdays as well as weekends
As primary/main mode of transportation (weekdays & weekends)
Only on weekdays (home-office and meetings-home)
Only on weekends
On weekdays & weekends but Uber is not primary/main mode of
transportation
17
85% Uber users are happy with the services whereas 11% indicated that they
are unhappy
Uber in Malaysia: Satisfaction with the Offerings/Services
Source: Frost & Sullivan Analysis; Primary research with Uber users and non-users in Malaysia. Note: The findings in this section are purely based on survey outcome/results;
1. Compared to MyTeksi and GrabCar
Satisfaction with Uber
1 2 3
Unhappy Neutral Happy
Satisfaction with Uber
1 2 3
Unhappy Neutral Happy
Satisfaction with Uber
1 2 3
Unhappy Neutral Happy
Satisfaction with Uber
85% Respondents
n=111
4% Respondents 11% Respondents
“Sometimes drivers take too long to arrive”
Difficult to find vehicles in some areas
Surge Pricing
Poor navigation system
Fewer Promotions1
Key reasons cited by users who are unhappy with Uber
18
7%
19%
25%
26%
30%
33%
41%
59%
63%
No change required
Include two-wheelers
Allow user to insert saved note/comment (e.g. saved addressor exact pick-up point) while making a booking
Improve the navigation system/software
Instead of surge pricing, there should be an option for a user-defined tip i.e., additional sum in order to attract drivers
Surge pricing should be reduced
Surge pricing should be stopped
Improve timeliness. Sometimes drivers take too long to arrive
Increase the coverage to more number of cities
0% 10% 20% 30% 40% 50% 60% 70%
63% interviewed users have suggested that Uber should increase coverage to
more cities; 59% have suggested to improve the time taken by drivers to arrive
Uber Services: Improvements/changes suggested by interviewed users
Source: Frost & Sullivan Analysis; Primary research with Uber users and non-users in Malaysia. Note: The findings in this section are purely based on survey outcome/results
Service Improvements
n=111
Percentage of Respondents
Several suggestions are around
the Surge Pricing
19
Interestingly, majority of respondents across segments* use other service
providers as well. MyTeksi1 is a popular option
Usage of other/similar service providers
Source: F&S Analysis; Survey with Uber users & non-users in Malaysia. Note: Findings in this section are purely based on survey outcome/results; * Overall, those who do not use Uber,
those who are happy as well as those who are unhappy with Uber; 1. MyTeksi is now known as Grab. It is an on-demand taxi booking service and uses the local taxis; 2. GrabCar uses
private cars/drivers like Uber. The company also offers MyTeksi option which is now known as Grab. MyTeksi (Grab) and GrabCar use a common phone application; 3. Car Sharing using
vehicles with Internal Combustion Engines (ICE) – e.g. GoCar; 4. Car Sharing using electric vehicles - e.g. COMOS; 5. Users not using any taxi, rental, leasing or car sharing services
Competition
60%
51% 57%
75%
51% 48%
51% 50%
29%
38%
22% 25%
3% 0%
4% 0%
3% 0% 0% 0%
11% 13% 13%
25%
0%
25%
50%
75%
Overall (n=140) Not using Uber (n=29) Happy with Uber (n=92) Unhappy with Uber (n=12)
MyTeksi¹ GrabCar² Car Rental/Leasing Car Sharing (ICE)³ Electric Car Sharing⁴ None⁵
The data in the above chart reveal that consumers are not loyal to a particular service provider and pick & choose service
providers on the basis of requirements
Some respondents indicated that they do not trust Uber drivers in terms of finding the shortest/fastest route. Hence, if they are in a
hurry, they opt for local taxis (typically through MyTeksi)
75% interviewed unhappy Uber consumers use MyTeksi. (Note: the sample in this segment is not statistically significant)
20
79% 21% 21%
21% respondents indicated that they do not use Uber. The primary reason is
that they prefer using their own vehicles as it offers more convenience
Reasons for not using Uber
Source: Frost & Sullivan Analysis; Primary research with Uber users and non-users in Malaysia. Note: The findings in this section are purely based on survey outcome/results
Reasons for not using Uber
13%
17%
34%
50%
63%
Unable to register credit card
Apprehensive about mobiletransaction
Prefer own vehicle as it is cheaperto use
Prefer Grab Car or MyTeksi
Prefer own vehicle as it is moreconvenient
0% 10% 20% 30% 40% 50% 60% 70%
Use Uber (111 respondents)
Do Not Use Uber
(29 respondents)
Percentage of Respondents
21
Table of Contents
Section Slide Number
A. Snapshot of Key Findings and Executive Summary 03
B. Uber in Malaysia: An Introduction 08
C. Findings from Frost & Sullivan Survey
C1. Profile of Respondents 12
C2. Usage of Uber 13
C3. Satisfaction with Uber 17
C4. Service Improvements 18
C5. Competition 19
C6. Reasons for Not Using Uber 20
D. Key Takeaways 22
22
Key Takeaways (1/2)
The future success of the company in Malaysia would significantly depend upon how it tackles
some of the controversies around the services and the income of drivers
In Malaysia, a country with high motorization rate, heavy traffic congestions, parking problems,
and inadequate public transport infrastructure, Uber has managed to provide an alternative,
convenient and affordable mobility option to people
Uber offers three different options, which fit the requirements of most users. Due to the benefits it
offers, Uber has managed to attract non-vehicle owners as well as vehicle owners
It has managed to attract a sizeable number of private drivers (around 60,000), who look for an
additional source of income in difficult economic environment
1
2
3
4
23
Key Takeaways (2/2)
Uber is offering a „sweet-deal‟ to its drivers at this stage as it guarantees a sum based on the
hours clocked-in during peak hours. Some drivers believe that once the company reaches a
threshold, it would no longer offer such a deal. It would be crucial for Uber to ensure that they
retain the existing drivers
The survey findings suggest that Uber is popular among the „non-vehicle owner‟ segment,
irrespective of whether they are Malaysian citizens or expats
5
6
Several interviewed Uber users indicated that the surge pricing is a pain-point and in recent
times, they invariably have to pay slightly higher due to surge pricing. Uber should target wide
availability of drivers by adding more drivers
7
Government is putting a lot of focus on improvement of transport infrastructure. Some projects
are due for completion in 2018-19. Frost & Sullivan believes that growth in transport infrastructure
would not act as a „threat‟. Instead, it would present new growth opportunities to Uber
8
24
Research Team
Animesh Kumar Associate Director
Automotive & Transportation Practice
(60) 3620 45818
Lead Analyst & Research Manager