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Business

How a 'sea turtle' changed Southeast Asian transportation

Tan Hooi Ling, an engineering student-turned-entrepreneur, co-founded the ride-hailing startup Grab. (Photo by Keiichiro Asahara)

KUALA LUMPUR Four years ago, at a coffee shop just outside Kuala Lumpur, a young woman with a smartphone in her hand, looking a bit out of place, eagerly explained to local taxi drivers how to use a ride-hailing app.

This is how Tan Hooi Ling started her business. The 32-year-old is the co-founder and chief operating officer of Grab, the biggest ride-hailing mobile service provider in Southeast Asia, whose app has been downloaded more than 21 million times in six countries.

Her father is a civil engineer, and her mother was a stock broker. Fond of tinkering with machines since she was a child, she said her parents' savings allowed her to study engineering at a U.K. university. "I had never thought about launching a business," she said.

The turning point came when she was studying at Harvard Business School, which she received a scholarship to attend from her employer, the consulting company McKinsey. At the school, she encountered fellow Malaysian Anthony Tan, who founded Grab jointly with Hooi Ling and now serves as the company's CEO.

Lectures at the prestigious business school were always pragmatic. A business plan that Hooi Ling and Anthony proposed together in a class on "Business for BOP" (base of the pyramid, or low-income people) finished second at an on-campus pitch event. Hooi Ling and Anthony spent days perfecting the idea. "She was working on her laptop even when we went on a skiing trip to Colorado," said Arum Kang, her former Harvard classmate.

Kasturi Rangan, a Harvard Business School professor who taught Hooi Ling and Anthony, said Hooi Ling's upbringing in Malaysia and her strong analytical abilities "enabled her to spot opportunities where most may have simply overlooked the possibilities."

Taxis in Malaysia are notorious for being unsafe and unreliable. "You never really trusted your drivers [and] cars were very smelly," Hooi Ling said. Drivers would often take longer routes to rip off passengers, some of whom were even assaulted or robbed. Meanwhile, Malaysian taxi drivers, whose income is unstable due to chronic traffic congestion and a difficulty in estimating waiting times, are typical examples of the so-called BOP.

IT'S WHO YOU KNOW After graduating from the business school, Hooi Ling was supposed to work at McKinsey's San Francisco office for two years. However, she decided to cut her time short, pay back her scholarship to McKinsey and return to Grab. She was convinced that the idea she and Anthony came up with would change Malaysian society by bringing benefits to both taxi customers and drivers.

"We trust each other to the core [and] have complementary strengths," said Anthony, the scion of a family that owns a large automotive business. He assumes a high-visibility role, taking charge of speaking to investors. Hooi Ling, the engineering student-turned-entrepreneur, said she likes to work behind the scenes.

Some of Hooi Ling's personal experiences taking taxis in Malaysia are reflected in Grab's service. The app enables passengers to share with their families, through email, information on exactly where they are. Passengers can rate drivers after their rides, and drivers with bad reputations are expelled.

Hooi Ling likes to keep a close relationship with Grab drivers. She uses the app herself "every single day" to collect feedback from drivers, she said. Jimmy Gan, a driver and an avid user of Grab whom Hooi Ling calls "Uncle Jimmy," describes Hooi Ling as an "approachable lady and a good listener." Since he started using the app in 2013, his income has increased more than 15%.

The app opened up new job opportunities for women. Grace Ong, a female taxi driver in Kuala Lumpur who uses Grab, aims to earn 400 ringgit ($96.2) a day. As Grab also requires passengers to register, the app makes it safer for women to work as drivers.

Attracted by a business model based on local conditions, investors have rushed to provide funds to Grab, boosting its corporate value to an estimated $1.8 billion. That has made the company the first "unicorn," a startup company valued at $1 billion or more, launched in one of Southeast Asia's emerging economies.

Against the backdrop of economic development, young people in Asia are showing increasingly greater willingness to start and run businesses. In the year ended June, a record 111,101 people with Asian citizenship sat for the GMAT (Graduate Management Admission Test) exam, a test for applicants to business graduate schools around the world. Women accounted for 52% of Asian examinees, compared with 44% for all examinees.

Young Asians returning to their home countries after studying in the West are sometimes called "sea turtles." Asian industry, where state-run enterprises and conglomerates have had an upper hand, faces a new era of entrepreneurship in which young leaders are breathing new life into the business world, and female sea turtles will play a key role in setting the course for the future.

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