[THE INVESTOR] Korean blockchain startup MVL Chain is a breath of fresh air in Singapore’s ride-hailing market where homegrown Grab enjoys a nearly monopoly.
Since its debut in July, its mobile app TADA, meaning “ride” in Korean, has attracted more than 15,000 drivers and about 70,000 customers as of September, becoming the second-most popular service in the market among a dozen other similar services there.
“Our goal is not to beat out Grab. We aim to offer what Grab has failed to offer,” MVL Chain CEO Kay Woo told The Investor in a recent interview.
MVL Chain CEO Kay Woo
The best incentive for using TADA is it is a fee-free service. Unlike other ride-hailing apps like Uber and Grab, TADA, running on a blockchain platform, charges no commission fees. Drivers earn better profits, while customers are incentivized with tokens for joining the platform like posting reviews on service quality.
The token, called MVL, was listed on several crypto exchanges, including Coinbene and Cashierest.
TADA’s launch in Singapore came at a time when complaints were growing about Grab’s enhanced market position following its acquisition of Uber’s Southeast Asian business in May. Facing fierce competition from the powerful US rival, Grab used to offer generous incentives to attract more drivers, while lowering basic fares. But the incentives have reduced since the merger, with no more discount coupons for customers.
“Our no-commission policy immediately garnered keen attention. Without huge marketing activities, our service was being spread by word of mouth among drivers and users there,” Woo said.
TADA maintains a similar pricing policy with that of Grab. But the drivers earn more profits because they don’t need to share profits with the platform operator.
“MVL tokens are basically financial assets for now, but we plan to further diversify their usage by connecting the platform to mechanic shops and rental car firms. The increased value of the data will raise the coin value as well,” the CEO said.
TADA’s next destination is Vietnam, a fast-growing ride-hailing market in Southeast Asia where resistance toward Grab is fiercer than in its hometown Singapore. The firm has teamed up with local partners, including taxi and insurance companies, to launch services in the coming months.
Woo who studied electrical engineering at Seoul National University and statistics at Columbia University in New York founded easi6, a Seoul-based fleet management system operator, back in 2012. After years of experience in mobile rental car service in Asia, he set up MVL Chain in Singapore in February this year.
“We had planned to launch TADA in Korea but it takes a lot of money due to regulatory hurdles. So we had to turn our eyes to Singapore, one of the largest and less-regulated ride-hailing markets,” Woo said.
In Korea, ride-hailing service is still illegal due to complicated regulations and resistance from taxi drivers. Only a limited number of services like luxury limousines and vans are allowed selectively.
Ahead of its planned initial coin offering, Kakao Mobility that owned a 15 percent stake in the firm also withdrew its investment worth 700 million won (US$620,000) amid the Korean government’s increased scrutiny over crypto trading, including a complete ban on ICOs.
But the CEO stressed he is not giving up on the Korean market, hinting at the firm’s possible comeback next year through a partnership with a Korean conglomerate. He declined to further elaborate.
“We will continue our efforts to build a mobility ecosystem where drivers are better incentivized and users enjoy upgraded services,” he added.
By Lee Ji-yoon (firstname.lastname@example.org)