Grab Holdings has announced that it will be acquiring 100% of the shares in Singapore's third-largest taxi operator, Trans-cab Holdings.
The acquisition, which includes Trans-cab’s taxi and car rental business, maintenance workshop, and fuel pump operations, will be made through Grab's GrabRentals arm.
The story was first released by broadsheet The Straits Times, which reported that Grab will take over Trans-cab's over 2,200 taxis and 300 private-hire vehicles for an undisclosed amount which is said to be around $100 million.
In its statement dated July 20, Grab noted that the acquisition will be accretive on a net income basis to its business.
“Consumer behaviours have shifted and we’ve recognised for some time the need to digitise the business and ensure our taxi drivers can continue to be competitive. We are confident this deal protects their future,” says Jasmine Tan, General Manager, Trans-cab. “Grab’s industry-leading tech will help our taxi drivers drive more productively and safely while serving their passengers better. We know that Grab cares deeply about their driver-partners, just as we do. We are entering this deal with full assurance that Grab will do their best to safeguard the livelihoods of our taxi drivers.”
Teo Kiang Ang, the founder and chairman of Trans-cab, said that the group was "very close to my heart, and our taxi drivers are like family".
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"Together with them, we grew Trans-cab from just a small fleet of 50 taxis two decades ago, to become Singapore’s second-largest taxi company at one point. As we consider their future and what is best for them, I feel assured that with Grab, we have found the right partner to hand over Trans-cab to, who will do what is best for the drivers and the business,” he adds.
Yee Wee Tang, managing director of Grab Singapore, saw the move as a "strategic match with win-win-win outcomes for all".
"By boosting the number of drivers on our platform and helping them to operate more efficiently, we improve how quickly and reliably we find a ride for our passengers, whenever they need one," he says, adding that Teo's story was "truly inspiring".
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“[Mr Teo] built multiple successful businesses from humble beginnings and we’re incredibly proud to continue part of his legacy. Trans-cab is a very well-run taxi company and there is a lot that we can learn from Mr Teo and the Trans-cab team. We look forward to welcoming the Trans-cab fleet and team into ours," says Yee.
Upon the completion of the acquisition, Trans-Cab will be the first local taxi company to be acquired by Grab. "Acquiring Trans-cab’s taxi and car rental business will give Grab a larger base of driver-partners, benefiting passengers with more reliable allocation, especially during peak hours," says Grab in its July 20 statement, noting the industry-wide driver supply crunch in Singapore which resulted in higher taxi and private-hire fares due to the supply and demand imbalance.
The transaction has been approved by the board of directors of Grab and Trans-cab and it is expected to be completed in the fourth quarter of 2023, subject to regulatory approvals.
In its 1QFY2023 results ended March 31, Grab reported a loss of US$250 million, marking a 43% improvement on a y-o-y basis. The group's revenue for the quarter surged by 130% y-o-y to US$525 million.
Shares in Grab closed at US$3.51 on July 19.
