Product Analysis on Ryde Singapore
Hello, my name is Ben. I am currently waiting for my visa to be Product Manager at Grab. This article is one of some articles that I plan to write, not all of them will be about ride-hailing. Feel free to give feedback and have discussion on the analysis. You check more article (still incoming) here: https://analysemobileapps.wordpress.com/
Article Structure
This analysis method is inspired by Product-Market Fit pyramid by Dan Olsen
- What is Ryde? — Quick background on the company/apps
- Fundamental Strategy — What is the target customer with the under-served needs & the revenue streams
- Value Proposition — What values that the apps want to convey to the customer
- Feature Set — Top 2 or 3 interesting features that were derived from app’s value proposition
- Revenue analysis August 2018 — How much rate of revenue do they have
- Conclusion & Possible direction
What is Ryde?
Ryde is one of ride-hailing apps in Singapore (2015) & Hong Kong (2016) (1). It was started as carpooling apps which later enters private-hire and door-to-door delivery after Uber has left Singapore market (2).
Fundamental Strategy
Core Business
In Singapore, ride-hailing by non-registered drivers is illegal. Thus, carpooling becomes a distinct type of business as opposed to private-hire industries. There are some limitations imposed on the carpooling such as number of paid hitch-hiking allowed (5). On top of that, there are heavy competitions in Singapore’s ride-hailing by private drivers from Grab & Uber. Focusing on carpooling rather than private hire (6) make Ryde position unique.
Target Customer
Ryde target customers consist of the drivers and the passengers.
The drivers are owners of cars who routinely commute with unused seat. This happens because they are some professionals driving alone to workplace or a stay-at-home parent dropping their kids to the school. These users did not have an option to monetize before Ryde comes in (of course there is GrabHitch today).
The passengers target customer is less distinct. They are anyone who wants to transport from one place to the other. Thus, the competition comes from multiple places such as Grab, Taxi or even Singapore MRT.
Revenue Streams
There are 2 revenue streams: take-rate fee (commission) in SG and driver subscription in HK. The rate is 5% for RydePool and 10% for RydeX (3). In Hong Kong, driver subscription fee was planned to be 150 yuan/year and will be freed for early adopter (4) but there is not much information on actual implementation that I can find on the net
Value Proposition
Ryde value propositions are Split Costs, Make Friends & Reduce Congestion. You can sense that they want to emphasize that they are different from other ride-hailing. They even emphasize that they are the first carpooling in their main SEO title, which means Grab/Uber were different from Ryde.
Among those 3, connecting people is probably the differentiator for demand side, which is the user side that has higher competition intensity. While above value proposition may be true, some users might not find this value compelling especially for some people who do not even want to converse with the drivers.
Based on personal experience & conversation with some ride-hailing users, it seems like price is the usual reason why people choose hitch-hiking over private hire. It is understandable that Grab/Uber want to avoid this selling point so they will not upset private-hire drivers but there is no strong reason why Ryde should avoid this (if there is one, please let me know).
Feature Set
As a Driver/Passenger in carpooling, I need more lead-time to have more efficient route management
When you first register to Ryde, you will get prompted to fill up your work/school schedule (left picture) as opposed to get shown on real-time booking interface. Middle and left pictures show how user setup their carpool schedule.
This is related to Ryde strength is in its carpooling activities. Carpooling requires efficient route management since driver need to have pickup and drop off point within their original route. This route optimisation is achieved by collecting all the data points first then letting driver/passenger decide if they are okay with the arrangement. Thus, encouraging user to setup their booking for tomorrow is preferable rather than unscheduled book surging in the morning.
As a Driver/Passenger in carpooling, apps engagement method should promote communication between both parties
Retention is single most important metrics for successful feature and engagement promotes retention. Playing competitive game is one method to increase engagement and this might be a good conversation starter compared to passive activities such as reading meme.
Revenue analysis August 2018
Estimated Yearly Run-Rate Revenue as of August 2018 is 149.1 mil/year with 60% revenue generated from ride-hailing, 30% from courier service & 10% from carpooling
Estimated yearly revenue = Singapore revenue + Hong Kong revenue
Singapore yearly revenue = private hire + carpooling + courier service
Singapore yearly revenue = 86.4 mil/year + 13,56 mil/year + 49.14 mil/year
Singapore yearly revenue = 149.1 mil/year
Hong Kong is negligible since they applied free subscription ride for now
Publicly Available Data
Based on Strait Times (16 Aug 2018) that quotes Ryde statement on the same date (7), we can learn that
- Ryde has 60,000 drivers
- 20% of them is private hire — 12,000 private hire & 48,000 carpoolers
- Targeting 20,000 courier delivery services ~ let’s take they have 10,000 courier now
Singapore Revenue Breakdown
Private Hire
Revenue = Fleet size * Working hour * $/hour * Commission rate
Revenue = 12,000 people * 1,800 hours/person * $40/hour * 10%
Revenue = $86,400,000/year
Fleet size = 12,000 private hires
Working hour
- 52 weeks * 40 hours/week/ person * 100% * 90% = 1,800 hours/person
- Assuming 100% full time workers
- Assuming 90% utilization rate (fleet number available means that everyone is still in the job, focusing only on Ryde)
$/hour
- $20/ride * 2 rides/hours *100% = $40
- Assuming average fee of $20/ride
- Assuming average time required of 30 mins/ride (including dropping and waiting for next customer)
- Assuming 100% or close to 100% utilization rate using the scheduling system
Carpooling
Revenue = Fleet size * Carpooling frequency * $/ride * Commission rate
Revenue = 48,000 people * 260 rides/person * $21/ride * 5%
Revenue = $13,557,600/year
Fleet Size = 48,000 people
Carpooling frequency
- 52 weeks * 5 day/week * 2 rides/day * 50% = 260 rides/person
- Maximum frequency = 2 times (government regulations)
- Driver availability % (since it is not full time job, they are likely to be flaky) — 50%
$/ride
- 1.5 person/ride * $14/person = $21/ride
- From difference between “book 1 person” or “book entire trip” which is less than 30%, we can infer that the ride has probably only 1.5 revenue of 1 person
- Assuming each person take $14 for carpooling (70% of on-demand)
Courier Service
Revenue = Fleet size * Deliveries frequency* $/Deliveries * Comission
Revenue = 7,000 * 23,400/year * $3 * 10%
Revenue = $49,140,000/year
Fleet size = 10,000 * 50% + 10,000 * 50% * 40% = 14,000 people
Estimated based on their target fleet count = 10,000 people
- Assuming 50% full time
- 50% part time with 40% of full time capacity (weekends only)
Deliveries frequency
- 52 week * 5 days/week * 3 complex/day * 15 deliveries/complex * 2 items/delivery = 23,400 items/year
- Each deliveries have 2 items (skewed due to office delivery)
- Each complex takes 15*10 min + 30 min = 180 min (3 hours) => 3 complex/day
- 1 complex will have 15 deliveries/complex
- Each deliveries take 10 mins on average to finish because you need to walk from 1 site to other
- Moving from 1 complex to another take 30 mins
$/deliveries = $3/items
Commission taken by Ryde of 10% (equal to RydeX)
Conclusion & Possible Directions
- Ryde has different strategy compared to Grab & Uber. They are carpool-first rather than for professional private-hires.
- Carpool apps work more efficiently on highly dense population because there are higher chances that drivers and passengers are in the same route. This means, targeting city-states like Singapore, Hong Kong & Taiwan is a good expansion choice. Besides of that, it is possible to target locally on the major cities in South East Asia.
- Carpool has less supply competition compared to ride hailing so it is a good idea to attack on this supply side first.
- After securing supply, demand growth can be unlocked by price incentive & providing more supply through heavily discounted ride-hailing
- After achieving demand stability, monetisation is done through private-hiring & courier rather than carpooling. This is based on estimation above that Ryde current revenue structure is 60% private-ride, 30% courier & 10% carpooling
