Local ride-hailing apps have gained traction in Phnom Penh and fared better than expected following the arrival of international heavyweight Uber and regional giant Grab. Developers chalk it up to a first-mover advantage and a simple yet intuitive design.
When Hor Daluch introduced the first ride-hailing smartphone app to the Cambodian market two years ago, the drivers he recruited were as intrigued by the technology as they were by opportunities it presented for them.
Like Uber, the US-based ride-hailing giant that the app and business model were based on, Daluch’s ExNet platform used the GPS connectivity of smartphones to locate and connect drivers and passengers, and determine rideshare fares. And while many foreigners were already familiar with the concept, few Cambodian drivers had ever heard of it.
“At first, it was difficult to get drivers, because they didn’t understand the app,” says Daluch. “So we sent staff out to explain to them, hosted teaching sessions and waited for drivers to spread the word about what we were doing.”
Daluch launched ExNet in June 2016 with just two freelance drivers, though within just two months another 60 had signed on. By then ExNet’s ride-hailing app already had its first competitor. Soon it had another, and then another.
“I decided to introduce an app when I realised how popular iPhones had become in Cambodia, so I had an international company create the app for me and launched mobile taxi-hailing services,” Daluch recalls. “I was the first, but dozens of others were created soon after.”
Given Phnom Penh’s notoriously congested streets and reputation for tuk-tuk drivers gouging customers on fares, it was little surprise that ride-hailing apps quickly caught on. By the end of 2017, no less than six local apps were competing for a share of the market, while both Singapore-based Grab and US-based Uber had rolled out services in the capital.
Daluch said with so many competitors now vying for fares, the most successful ride-hailing businesses will be those with a simple and intuitive platform.
“I think the first thing that is important for the success of a ride-hailing service is the app itself,” he said. “If it is difficult to use the app, then it will not be successful.”
While all ride-hailing apps provide a scalable map that allows users to select a pickup and drop-off location, and shows a driver’s position, at least three of the local ride-hailing apps in Cambodia share platforms so similar that at first glance they appear identical.
This should not be surprising as ExNet, PassApp and UGo 711 all purchased their white-label platforms from the same US tech firm, which continues to update and maintain the apps for a monthly service fee.
“Some of our [local ride-hailing] apps are the same, and the prices we charge our customers are all very similar,” said Top Nimol, founder of PassApp. “The thing that makes us different is how we sell the service to our customers.”
While ExNet was the first ride-hailing service in Cambodia for taxis – though it has since expanded to include other types of vehicles – PassApp was the first to launch services for the ubiquitous tuk-tuk.
“There were about three or four others who tried to launch at the same time as I did, in November 2016, but none of them have survived,” said Nimol.
Nimol credited PassApp’s success to the network of customers he had already established through a prior venture called EZGo, which operated as a call centre for customers interested in hailing metered tuk-tuks, in this case a nimble fleet of Bajaj three-wheelers.
“EZGo was my first venture, which was just a call centre I set up in March 2016 for anyone who wanted [to order] an Indian tuk-tuk,” he said. “But it was difficult to assign drivers over the phone, and hard for customers to explain where they needed to be picked up or dropped off. I knew I could not grow the service without making a big change.”
The migration of customers from EZGo to PassApp gave the app a strong early following, while offline features such as a 24-hour call centre to help customers recover items they accidentally left in their rides, has helped grow the business.
“We have about 1,000 drivers just in Phnom Penh,” said Nimol, adding that most customers use the app to book tuk-tuks, while taxi drivers account for just 30 percent of the total registered drivers.
“We are now the first ride-hailing app to expand outside of Phnom Penh, moving into Siem Reap a month ago and Sihanoukville about two weeks ago,” he added.
Mom Cleomora, CEO of local tech firm iTsumo Technologies, claims the distinct look of his company’s iTsumo app is because it was only ride-hailing app created entirely by a team of Cambodian developers.
“As far as I know, all ride-hailing apps here were created by other countries except for iTsumo, and we are very proud of this,” said Cleomora. “It is our challenge to prove how much local engineers can do, and we are very excited about this.”
Launched in January 2017, iTsumo has grown into a network of 1,500 registered drivers, half of whom drive taxis and the rest operate tuk-tuks or motorbikes. Previously only available in Phnom Penh, the company is also expanding beyond the capital, having in recent weeks launched limited service in Siem Reap, Sihanoukville and Kampot.
Cleomora, who manages the team of five fresh tech graduates that developed the iTsumo platform, said his app has one other advantage over its local rivals: price. iTsumo charges its drivers nine percent of their profit as a booking fee – what just might be the lowest commission rate of any ride-hailing app in the market.
“Since we developed iTsumo by ourselves, we don’t need to pay royalty fees or maintenance fees like other apps, so we are able to charge the lowest commission fee,” he explained.