In the next in our series of Loyalty Landscape Review articles, we’ll be giving some insights into the loyalty and rewards programs of three of Singapore’s favourite ride-hailing apps: Grab, Uber and ComfortDelGro. Globally, there’s been a fierce competition to own the customer within the transport sector – and it’s a necessary competition. A good loyalty program can drive habit and will result in a higher Customer Lifetime Value.
Grab and Uber (new players both born in the digital age being introduced in 2012 and 2013 respectively) are the two leading private transport hire companies in Singapore, while ComfortDelGro has the biggest owned taxi fleet on the island, and hails from a time when ordering a taxi was just a matter of flagging one down or booking via the telephone operator.
All three providers are in a direct battle with each other for their customers’ loyalty, emphasized by the fact that all three providers launched loyalty and rewards programs in the past year, with each offering different benefits for passengers to keep them using their apps.
With the transportation and private-hire market being so small in Singapore, any effort to retain customers puts their business at an advantage.
Grab and GrabRewards
In late 2016, Grab launched a beta test of their Grab Rewards program – a free rewards program built directly into the Grab app that allowed customers to earn points for their rides. Users then redeem points for discounts, offers and vouchers at participating partners.
Today, their rewards program is offered to every user at no additional cost, and is built directly into the Grab ecosystem – as long as Grab users update their app, they don’t have to sign up separately to be a part of the program. Users can immediately start earning points with every ride.
At its core, Grab uses a pretty standard point system: users earn one point per dollar spent. This means more points for higher priced rides: rides during peak periods, long distances and using premium vehicles will earn more rewards points. At certain times during the year, Grab offers multipliers, or boosts, where customers can earn more points to redeem rewards quicker. Some boosts include earning double points when paying through Grab’s own payment system GrabPay.
Marketing their boosts is also a great way to encourage customers to use their platform over others: passengers don’t want to miss out on higher rewards, and are more likely to get a Grab if it means quicker rewards redemption in the future. This leads to a higher app usage rate for Grab.
Like many points programs, Grab accompanies it with a structured tier system: it’s a way for users to climb through the loyalty ranks and transition from being customers to being Brand Advocates.
Grab’s tier system is easy to understand, and offers users increasing discounts the higher their rank is. What we found a little confusing was the tier timeline:
There are 2 reward periods in each calendar year, each lasting for 6 months. Users might find themselves downgraded to a lower tier – meaning lower benefits – if they don’t earn enough points within a 6-month rewards period.
Grab users have the freedom to choose what to redeem their points on through the Grab Rewards catalogue. The private hire group has crossover rewards from different lifestyle brands in Singapore for customers to choose from: Deliveroo, Spotify and KFC are some of their currently featured partners.
The big news is that Grab recently announced a partnership with Singapore Airlines – a move that allows customers to book a Grab to/from the airport through the SingaporeAir mobile app, or to convert their Grab Rewards points to KrisFlyer miles. KrisFlyer miles can be used to offset prices on flights with Singapore Airlines/Scoot, upgrade seats and buy duty-free items in-flight.
A voucher for $5 off Grab rides cost 2200 points – and going by Grab’s $1 = 1 point rewards system, it is incredibly expensive to earn even a small reward. However, Grab consistently rolls out boosts and multipliers, which can make redeeming rewards easier.
For example: accompanied by Grab’s boosts and multipliers, a $10 ride could easily earn a user 160 points. In that case, it would take around 13 trips to earn a $5 off Grab ride voucher. Without the boosts and multipliers, it would take 220 rides to earn a $5 off voucher – something a lot more difficult and unrewarding to achieve.
Users are also more likely to save their points for perceived high-value rewards, like $10 off a Deliveroo purchase (3350 points) or $20 off a Grab ride (7200 points).
Something that caught us off guard was the 6-month reward periods: it’s the norm for brands to offer their customers a full year of perks once they move into a higher tier level. Six months seems a bit short for customers to fully enjoy their reward level. This move could be because Grab is a private transportation company, where users are more likely to take rides daily – as opposed to an F&B outlet like Starbucks, or retailer like Sephora, where customers are not as likely to make daily visits to. It still could benefit them to rework this rewards period to prevent customers from losing interest.
The great thing about Grab Rewards is that you automatically earn rewards for your rides, and you can redeem rewards not just from Grab, but also from lifestyle, retail and F&B merchants around Singapore – including Singapore Airlines. Overall, this is a really well-thought-out rewards program that puts the customer at the center of their business model.
In early 2017, Uber announced its participation in the LiveUp loyalty program. Helmed by Lazada, and including brands like Netflix, Ubereats and Redmart, the LiveUp program was formed to create a lifestyle loyalty program that rewarded you for your membership. Membership costs SGD $28.80 per year, with a 60-day trial available for first-time sign-ups.
Under the LiveUp program, Uber passengers get every 10th ride free (up to a maximum value of $10). This offer is only redeemable 12 times a year. Uber’s involvement in the LiveUp program also allows members access to the VIP vehicles (Uber describes this as their best-serving drivers and partners) at cheaper UberX prices.
A secondary reward offered by Uber for LiveUp members is free delivery on their UberEATS platform; with orders greater than SGD $35, LiveUp members are entitled to a refund of their delivery fee of SGD $3. The refund is made available as a discount on the user’s next UberEATS purchase, and is redeemable a maximum of 4 times a month.
We wish there was more to analyse, but Uber’s partnership with LiveUp doesn’t seem like a very rewarding package for their passengers – especially so for their high-volume users. Uber is limited by not offering it’s own loyalty package: partnering with LiveUp makes it less about rewarding Uber’s customers, and more about the LiveUp package. It’s less personalized, and essentially a basic digital stamp card program.
The other drawback of Uber’s rewards program through LiveUp is that a user would have to pay to join and earn rewards. The implication is that a user would find the other services offered under the LiveUp program worthwhile before spending SGD $28.80 to sign up – and if they chose not to, would not be offered rewards with Uber.
With a $10 discount off 12 rides a year, members are seeing a maximum of $120 discount off their yearly rides. Users would have to take 9 $10 rides to unlock their ‘free’ / heavily discounted ride – an 11% discount. It’s a fairly decent value return rate, but this value return heavily depends on the value of the previous 9 rides.
High-volume users are better off using Grab’s platform for private hire rides in Singapore – because for a similar spend, the rewards are at a much better value.
ComfortDelGro is a familiar name to people who have been in Singapore for a long time. This taxi and transport company has been the main player in Singapore’s taxi scene since 2003, when Singaporean land transport companies Comfort and DelGro groups merged. Currently, they have about 17,000 taxis on the streets.
With the introduction of Grab and Uber, however, traditional taxi companies in Singapore have seen a decline in passengers. Reports indicate that close to 10% of taxis are unhired today, up from an average of 3% previously, and it’s worth noting that the general consensus is that private hire companies see higher customer satisfaction than traditional taxis.
The number of active and available taxis in Singapore has also dropped from 28,000 to 25,700 since the private-hire companies came on the scene. Taxis have been criticized for their high surcharges and increasing base rates, which leads to unpredictable pricing – a driving factor in users switching to private hire companies like Uber and Grab, who are more transparent with their upfront, flat-rate pricing.
Hailing a taxi seems almost like an archaic thing to do in the age where an affordable ride is only a click away – but ComfortDelGro has caught on to this trend, and in April 2017 launched a new flat-fare booking option through their ComfortDelGro Taxi Booking app. This option is set alongside a metered fare option, so customers can decide which they prefer before they make the booking.
In June 2017, ComfortDelGro launched CabRewards+ (an upgrade to the CabRewards program they launched in 2014) in a bid to stay relevant in the transport loyalty space.
CabRewards+ was launched with the intention of rewarding cashless payments. To join, current ComfortDelGro app users have to log on to the CabRewards website to sign up for the program. There, users can manage their account, redeem rewards and view promotions for the year.
With CabRewards+, members are encouraged to register up to 2 EZLink or NETS FlashPay cards to their account upon signup. (EZLink and FlashPay cards are used for all public transportation in Singapore, and some retailers and taxi companies have started incorporating EZLink and FlashPay payment into their cashless transaction merchant lists.)
Once a user registers their cards with CabRewards+, they’re on route to receiving double points with each dollar spent – with the caveat that they take a ComfortDelGro cab within 24 hours from using public transport. This is verified by the passenger tapping their EZLink or NETS FlashPay card on the CabRewards+ terminal at the end of their taxi journey. Passengers who don’t fit this criteria will earn the basic 1 point for every dollar spent.
Users can redeem fifty cents off one ride with every 83 points accumulated. That means a consumer would have to spend SGD $41.50 to receive $0.50 off one ride.
Currently, members receive 5x the rewards points during their birthday month, a promotion valid only for 2017.
In the CabRewards+ rewards boutique, users are given the option to redeem from a list of offers. All these offers are directly related to ComfortDelGro, and they do not offer crossover rewards from participating partners. If a user chooses to redeem a voucher, they can select it on the website and the voucher will be mailed to them within 14 working days.
It’s definitely not our favourite program. While we applaud their efforts to go digital (it’s a must when competing with technology-driven companies like Grab and Uber), it still feels incomplete. Cabrewards+ offers customers a lot less reward for a lot more effort.
For example, mailing users their discount vouchers within 14 working days removes the effectiveness of the reward. For a rewards program to truly work in the digital world, the rewards must be seamless and immediate. For a digital rewards program, this misses the mark.
To earn a $5 reward voucher on the CabRewards+ program, a customer would have to earn 1000 points. Assuming SGD $10 cab rides with a reward of 2 points per dollar spent, a customer would have to take 50 rides to earn that $5 off. Spending $500 to receive a $5 voucher is one of the lowest returns we’ve evaluated so far, with the payoff only being worth 0.01% of the customer’s total expenditure.
The program itself is a little complicated to understand. A passenger would have to tap on the registered cards on the taxi’s cashless payment terminal once they end a ride to earn CabPoints, but the double point system only applies if they have taken a form of public transportation in the previous 24 hours. It’s a great way to ‘reward’ taking public transportation, but alienates all passengers who take ComfortDelGro taxis exclusively – ultimately a poor reward for (arguably) their best customers.
The loyalty market between these three providers is tight – but Grab seems to be paving the way with a cohesive rewards program. At Riverview, we know how incredibly important it is to create a loyalty program that rewards your customer for being a customer – and this principle applies to businesses in every industry. We think that the step into digital loyalty is the best decision a business can make for their customer, and they will be rewarded with an increasing bottom line. Companies that take that first step tend to see that even a 5% spend on customer loyalty can increase profits by up to 90% – and that the probability of selling to a repeat customer is 50% higher than acquiring a new one.
At Riverview, we’re all about mobile-first customer retention solutions. Learn more about how companies can build an effective digital loyalty program here – and reach out to us if your brand is interested in taking that first step. We’re always happy to chat and schedule a platform demo.Reach out to us for a free demo, or click here to download our Product Edition Sheet.