SINGAPORE (July 5): Singapore's Competition and Consumer Commission (CCCS) said on Thursday the merger of Grab and Uber had substantially lessened competition in the ride-hailing business in the city-state and proposed to impose financial penalties on the two parties.
The commission said it had proposed the financial penalties because Uber and Grab carried out the transaction despite having anticipated potential competition concerns, leading to lesser competition in the sector in Singapore.
Uber sold its Southeast Asian business to bigger local rival Grab, marking the US company's second retreat from an Asian market. Uber received a 27.5% stake in Grab in return.
See: Grab confirms acquisition of Uber's Southeast Asia operations; Uber CEO Khosrowshahi to join Grab's board
According to CCCS, both riders and drivers have complained about the merged entity in relation to the increase in effective price post-transaction.
Among the remedies proposed to restore market competiton:
- Removal of exclusivity obligations, lock in fees on all drivers who use Grab platform or rent from Grab Rentals or rental partners of Grab
- Removal of Grab’s exclusivity arrangements with any taxi/CPHC fleet in Singapore top boost choices for drivers and riders
- Keeping Grab’s pre-transaction pricing algorithm and driver commission rates until competition is revived in the market
- Requiring Uber to sell Lion City Rentals to any potential competitor who makes a reasonable offer; preventing Uber from selling rental company to Grab without prior approval from CCCS
CCCS is now seeking public feedback on remedies and may require Uber and Grab to unwind transaction unless public feedback confirms remedies are sufficient.
Uber and Grab have 15 working days to make representations to regulator; after which CCCS will make the final decision.
