Entrepreneur Jarrold Ong scrutinized with great attention how companies operating in the urban mobility sector, such as Uber, Grab, or Gojek, spurred out in 2015 to fill a gap created by the lack of adequate public transportation in Southeast Asia. Ong saw an opportunity in the sector but had an idea for a different business model.
“In late 2015, I met Arthur Chua, who was also starting to look into the urban mobility space. We decided to work together on a more demand-responsive ride-sharing solution,” Ong told CrASIA.
Ong had no experience in the mobility market. Still, he decided to leave his job as an engineering manager for video-on-demand (VOD) platform Viki to launch a startup with Chua, CEO of Goldbell Group, a leasing and distribution company for commercial and industrial vehicles. The two started mobility-as-a-service (MaaS) firm Swat Mobility in February 2016.
“It is an on-demand bus sharing service for the public. We have a tagline: price like buses, speed like taxis,” Ong said.
During its first six months, the Singapore-based company focused on developing an algorithm that calculates the fastest route for multi-destination bus trips in a certain area. Swat’s algorithm can pool users’ demands in real-time and calculate the most efficient routes for picking up and dropping off passengers, Ong explained. It provides drivers with better coordinates to avoid congested roads compared to Google Maps or Waze, also saving on gasoline costs. Passengers, instead, can set their pickup and drop-off locations on the app based on the routes provided by the algorithm, and can also check buses’ real-time arrival times.
Swat Mobility works with shuttle providers within certain areas to provide its services, as the company, similar to other ride-sharing services like Uber or Didi, doesn’t own the vehicles.
The company launched a B2C ride-sharing bus service in Singapore in 2016 based on its algorithm. To join the service, users needed to purchase a monthly subscription and request shuttle rides via the Swat Mobility app. However, the service was discontinued in early 2019, as Swat decided to switch its business direction to B2B and business-to-government (B2G) sectors.
A pivot to B2B and B2G
Ong and his team thought that the company’s services could also be employed to optimize Singapore’s public transportation system by working with governmental projects. In 2018, Swat won a six-month on-demand public bus service trial tender for the Singaporean Land Transport Authority (LTA), a program that allowed commuters to request pick-ups and drop-offs at any bus stop within defined areas. However, the Singaporean government canceled the project after its trial period in May 2019, as it was deemed not cost-effective to scale up.
However, Swat Mobility went on to win another B2G deal for an on-demand public transportation service in New South Wales, Australia, to “solve the first mile/last mile problem for residents,” Ong said. Passengers traveling in the same direction are pooled together in a shuttle bus based on orders made on the Swat Mobility app. Unlike normal buses that follow a fixed route regardless of the traffic situation, Swat’s shuttle buses run on a flexible route determined by the algorithm, which updates instantly to pick up new passengers.
“We help them to plan on-demand public transportation services, or smart city planning, with more cost-efficient public transport alternatives,” Ong said. Commuters no longer have to use different modes of transportation such as buses, trains, or bicycles for transit, he added.
After two years operating in the B2C and B2G sectors, Ong noticed that private companies could also use his technology. “For companies located in remote locations, they face problems hiring and retaining employees due to bad commutes with long journey times,” Ong said.
Even though some firms offer shuttle services for employees, there are still pain points to solve. “It can be very difficult to arrange transportation for complex routes and manually changing shift times. A lot of companies do not have a system to track and analyze ridership and utilization of vehicles, resulting in overpaying for inefficient services,” Ong explained.
The company entered the B2B sector in 2019, with marine and offshore engineering group Sembcorp Marine as its first client in Singapore. Swat Mobility provides pick up and drop services for over 1,000 Sembcorp Marine employees. In July 2020, co-working and staff leasing firm KMC Solutions also signed up for a similar service from Swat in the Philippines.
“This is possible as our algorithm pools all the employees and generates optimized bus routes for their commutes,” Ong said.
Since 2019, Swat Mobility has been exclusively operating in the B2B and B2G markets. “We have a mix of B2B and B2G customers, where we charge a monthly subscription based on either ridership or the number of deployed vehicles, depending on the use case,” Ong added.
Large opportunity in Japan
Swat Mobility currently focuses on three main markets—Japan, Singapore, and the Philippines—while its services are also available in Indonesia, Thailand, Vietnam, and Australia. The company says it has conducted 1 million annual trips since its launch.
Japan presents certain unique challenges and opportunities, Ong said, explaining that more than 28% of the country’s inhabitants are aged 65 or above, while its child population rate has continued to plunge for more than 40 years, reaching a record low of 11.9% in 2021. The demographic changes are also affecting the country’s mobility needs. Driving has been the preferred transportation method for most elderly people, especially those living in rural areas lacking proper public transportation, Ong said. However, in 2020, Japan faced a slew of fatal road accidents involving elderly drivers.
“The aging population requires new ways to get around, especially in rural parts of Japan,” Ong added.
Swat is running an on-demand bus service trial for Shimomachi’s residents in Niigata city, in the Chubu Region of Japan, as part of the “Smart Mobility Challenge” promoted by Japan’s Ministry of Trade, Economy, and Industry and the Ministry of Land, Infrastructure, Transport, and Tourism.
Swat Mobility has also been working with Japanese telco Jupiter Telecommunications, known as J:COM, providing transportation services for sales employees to and from business appointments. J:COM’s salespersons can book on-demand rides on shuttle buses via the Swat mobile app in the areas of Nerima, Tokyo, and Sakai in Osaka prefecture.
“As passengers, instead of drivers, they can prepare for meetings while on the rides and get to their meetings on time, without having to worry about driving or parking,” Ong said.
The company’s venture in Japan is supported by an array of local investors, namely Global Brain, The University of Tokyo Edge Capital Partners, iGlobe Platinum Fund II Pte. Ltd., and LKJ Capital Japan. “They certainly have a role to play in the decision to enter the Japanese market, but more importantly, we see many opportunities for our solutions to greatly improve mobility services for commuters and residents in Japan,” Ong said.
The company is reportedly considering an IPO in Japan, although Ong declined to comment about it. After an undisclosed amount of fundraising in February 2021, Swat plans to step up its game in Japan and increase its coverage from seven to 20 operational areas for public on-demand buses and corporate shuttles. The firm also aims to operate 100 vehicles in Japan by the end of the year.
Solving the current problem of training the algorithm to understand the “complex roads and traffic rules in Japan” is also in the pipeline, Ong said. Japan has many narrow streets and complex traffic rules compared to Southeast Asia, along with numerous one-way streets and turn restrictions, he explained. “Our solutions require detailed infrastructural information on Japan’s roads, which may not be easy to obtain.”
In the long run, Swat aims to branch out to other verticals such as logistics. In March, it partnered with online grocer UglyFood in Singapore. Swat’s algorithm assists UglyFood’s delivery drivers to calculate the shortest route possible to save time and fuel. “We plan to increase our productivity and capacity to deploy and operate a higher number of projects in our various markets and to expand our operations in new and existing verticals,” Ong said.
This article is part of KrASIA’s “Startup Stories” series, where the writers of KrASIA speak with founders of tech companies in South and Southeast Asia.