The Competition and Consumer Commission of Singapore (CCCS) has raised “competition concerns” over Grab’s proposed acquisition of Trans-cab.
The findings come after the CCCS completed its Phase 1 review, which refers to a quick review and allows merger situations that do not raise competition concerns to proceed. The review also includes third-party feedback from industry players and members of the public.
The third-party feedback received by the CCCS, in particular, suggests “concerns” about the effect of Grab’s ownership of the Trans-cab fleet on Trans-cab drivers’ usage of rival ride-hail platforms. This may “raise barriers to expansion and entry for Grab’s rival ride-hail platforms, given the importance of scale in the ride-hail platform industry,” noted the CCCS in its Oct 16 statement.
“Accordingly, CCCS needs to review the competition effects of the proposed acquisition in greater detail,” it added.
At this stage, both Grab and Trans-cab may offer commitments to address any potential competition concerns. Otherwise, the CCCS will proceed to a more in-depth Phase 2 review after receiving the relevant documents. Commitments may also be offered at any time during a Phase 2 review.
Grab Holdings, on July 20, announced that it would acquire Trans-cab, which includes its taxi and car rental business, maintenance workshop, and fuel pump operations. The acquisition was made through Grab’s GrabRentals arm.
See also: Grab to acquire Trans-Cab
In a statement to the media, a Grab spokesperson said that the company has noted the feedback from CCCS and added that its priority is to "work closely" with the CCCS "to address areas that require further review".
"Grab and Trans-cab are committed to ensuring that the acquisition benefits commuters and helps raise the overall standards of the point-to-point transportation industry. Digitalising Trans-cab’s fleet will improve driver productivity and taxi availability so that consumers can get a ride more easily. This will also improve driver earnings," said the spokesperson.
"We intend to abide by LTA’s P2P Regulatory Framework that promotes open competition and prohibits any form of anti-competitive behaviours such as offering exclusive arrangements to drivers. This means that Trans-cab drivers will continue to have the flexibility to earn through multiple ride-hailing platforms and pick up street hail rides," the spokesperson added.
Shares in Grab closed 5 US cents lower or 1.44% down at US$3.42 on Oct 13.
