SINGAPORE: Taxi operator ComfortDelGro and Uber announced on Friday (Dec 8) that they have entered into a strategic agreement to form a joint venture.
Under the agreement, which is subject to regulatory approval, ComfortDelGro will acquire a 51 per cent stake in Uber’s wholly-owned car rental subsidiary in Singapore, Lion City Holdings, the two parties said in a joint media release.
The latter, in turn, operates Lion City Rentals which has a fleet of about 14,000 vehicles. Uber will retain the remaining 49 per cent.
Valued at about S$642 million, with a cash consideration of S$295 million, it ranks as ComfortDelGro’s single largest deal to-date.
The deal will "create a path" for ComfortDelGro’s taxi drivers to receive ride requests on the Uber driver app, the release said.
It added that the transaction is expected to result in increased demand for both private hire and taxi drivers as well as increased choice, shorter waiting times, and greater reliability for consumers.
"By leveraging each other’s strengths, the move will establish a multi-dimensional, personalised mobility operator, encompassing both taxi and private hire vehicles, and providing a wide range of local transport options in an increasingly competitive environment," the release said.
ComfortDelGro called the deal a "win-win situation", with chairman Lim Jit Poh saying that the personalised mobility business has evolved greatly under the influence of apps such as Uber, subsequently changing the way consumers use public transportation and creating "a more efficient use of existing resources".
"By working together, we feel that we will be able to unleash a lot of synergy which will benefit consumers and drivers alike," Mr Lim added.
Uber’s chief business officer for Asia Pacific Brooks Entwistle said: "This joint venture is a testament to the tremendous potential of ride-sharing technology in this highly competitive local transportation market, and to our commitment to partnering for greater growth as we continue to build a sustainable global business."
Cabby Harry Ng, who has driven with ComfortDelGro Taxi for 22 years, welcomed news of the tie-up.
“I am excited about this latest development, and believe this is a good move for both companies and for us drivers. I'm looking forward to more booking jobs and more customers," he said.
The two companies are also finalising additional partnership opportunities and will make further announcements in the upcoming months.