RIDE-HAILING company Grab added S$5.2 billion to Singapore’s economy in 2023 through its on-demand services such as ride-hailing and delivery, an Oxford Economics report indicated.
This is equivalent to about 0.8 per cent of Singapore’s gross domestic product, said the research firm.
This is a breakdown of the S$5.2 billion contribution to the economy, said Oxford:
1. S$1.2 billion from Grab’s own operations, including activities such as hiring of employees and purchase of equipment and services from external vendors. Oxford calculated the direct GDP contribution from Grab’s operation using the sum of Grab’s earnings before interest, taxes, depreciation and amortisation, as well as wages paid to employees and taxes incurred.
2. S$900 million via merchant-partners on the Grab platform and their supply chains. Nearly half is attributed to their profits and wages, derived from their sales on GrabFood and GrabMart, driving more spending; the other half is from their supply chains, as well as workers’ income, which drives expenditure in the wider economy.
3. S$3.1 billion via driver and delivery-partners and their supply chains. The income they earn drives spending in the wider economy.
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Sectors that benefited the most from the wider supply chain impact were the finance and insurance, professional services, real estate, as well as the wholesale and retail sectors, said Oxford.
That in turn has translated to an estimated 117,000 earning opportunities across various supply chains, and S$2.5 billion in household income in 2023, said the research firm.
It defines earning opportunities as full-time jobs linked directly to Grab and its merchant- and driver-partners.
Oxford estimates that jobs driven by Grab’s on-demand service delivery in Singapore accounted for 1.1 per cent of the total employment of five sectors – information and communications, food services, retail, transport, as well as business and professional services.
James Lambert, director of economic consulting for Asia at Oxford Economics said: “Our analysis of Grab’s impact on Singapore’s economy shows that for every S$10 of GDP generated by Grab transactions, an additional S$6 of economic activity is created across the broader economy.
“This multiplier effect underscores the crucial role of platforms like Grab in fostering Singapore’s vibrant digital economy,” he added.
Grab is listed on the Nasdaq in the US, and its shares were last at US$4.64 as of Thursday’s close. The company is set to report its Q4 earnings on Feb 19.
The company is set to expand its network. It announced this month that it has partnered China’s BYD to expand its electric vehicle network across South-east Asia.
