Is it better for Grab to focus on improving the core ride-hailing experience or diversifying into new verticals like food delivery?

Introduction

The core trade-off we're examining is whether Grab should focus on improving its ride-hailing experience or diversify into new verticals like food delivery. This decision is critical for Grab's growth strategy and resource allocation. I'll analyze this trade-off by examining the current product landscape, potential impacts, and key metrics, then design an experiment to inform our decision.

Step 1

Clarifying Questions (3 minutes)

• Based on Grab's market position, I'm thinking ride-hailing is still our core revenue driver. Could you confirm our current revenue split between ride-hailing and other verticals?

Why it matters: Helps prioritize focus areas based on revenue impact Expected answer: Ride-hailing contributes 70-80% of revenue Impact on approach: Higher ride-hailing revenue would lean towards core improvement

• Considering user behavior, I'm assuming there's significant overlap between our ride-hailing and potential food delivery users. Can you share any data on cross-vertical user engagement?

Why it matters: Informs potential synergies and cannibalization risks Expected answer: 30-40% of ride-hailing users have tried food delivery Impact on approach: High overlap might favor diversification for user retention

• Looking at our tech infrastructure, I'm curious about the scalability of our current platform. How much additional load can our systems handle for new verticals without major overhauls?

Why it matters: Determines feasibility and cost of diversification Expected answer: Current infrastructure can handle 2-3x current load Impact on approach: High scalability would make diversification more attractive

• Regarding our team structure, I'm wondering about our current capacity for new product development. What percentage of our engineering and product teams are dedicated to core ride-hailing vs. new initiatives?

Why it matters: Assesses our ability to execute on diversification Expected answer: 70% core ride-hailing, 30% new initiatives Impact on approach: Low capacity for new initiatives might favor core improvement

• Considering market dynamics, I'm thinking about the competitive landscape in food delivery. How saturated is this market in our key regions compared to ride-hailing?

Why it matters: Influences the potential success of diversification Expected answer: Food delivery market is growing but has 2-3 established players Impact on approach: High saturation might favor focusing on core ride-hailing