Grab defends position in Uber deal to Singapore's anti-monopoly watchdog

Grab defends position in Uber deal to Singapore's anti-monopoly watchdog

A ComfortDelgro taxi passes Uber and Grab offices in Singapore
A ComfortDelgro taxi passes Grab's office in Singapore. (File photo: Reuters/Edgar Su)

SINGAPORE: Grab said on Friday (Jul 27) it disagreed with the Singapore anti-monopoly watchdog's assessment that its takeover of Uber's operations had harmed competition and called the commission's suggested measure of removing exclusivity arrangements with drivers "one-sided".

Earlier this year, Uber sold its Southeast Asian business to bigger regional rival Grab in exchange for a stake in the Singapore-based firm. But the deal has prompted regulatory scrutiny.

In early July, the Competition and Consumer Commission of Singapore (CCCS) provisionally found that the merger had substantially reduced competition and suggested various remedies, such as the sale of their car-leasing businesses and removing exclusivity obligations on drivers who use Grab's ride-hailing platform.

The CCCS is set to make a decision after Grab submitted its representation this week, and also taking into account public feedback. It has proposed fines on the firms.

READ: Could Grab and Uber be forced to unwind their merger? Unlikely, experts say

Grab disagreed with CCCS' assessment that the merger had harmed competition. In a written response, Grab said that it competes with all other transportation service providers for the same limited pool of commuters, citing a rider survey stating that 85 per cent of respondents agreed or strongly agreed that public transport options are substitutes for ride-sharing apps.

The competitive transportation industry has led to its diversity of services such as GrabHitch and GrabShare, to cater to different price points, it added.

With regard to the commission's suggestion for Grab to remove its exclusivity arrangements with drivers, Grab said CCCS has allowed other players and new entrants to maintain or enter into exclusivity arrangements with drivers, private hire rental fleet and taxi operators without restrictions.

"Grab believes that this double standard goes against the spirit of increasing choices for drivers and riders," it said, adding that Grab has proposed to the CCCS to lift its exclusivity arrangements, subject to it being applied evenly across the industry.

"Current market realities unfortunately do not reflect this, for instance, taxi operators are still able to restrict their drivers' ability to receive fixed-fare jobs on other platforms," it said.

The CCCS has said the exclusivity arrangements mean a new entrant would have to spend a lot of money to build up driver and rider networks similar in scale and size to the incumbents.

Grab was the dominant player in Singapore's ride-hailing market even before the Uber merger. It also competes with taxi businesses such as ComfortDelGro Corp Ltd.

Several new players, such as India's Jugnoo and Singapore-based Ryde, have recently entered the city-state's ride-hailing market. Indonesia's Go-Jek has also said it would launch services in Singapore.

Grab said it welcomes this competition and trusts that the CCCS would take appropriate measures to ensure a level playing field in the industry "without unduly favouring or disadvantaging any particular player".

READ: Commentary: Ride-hailing apps – consumers have to ‘suck it up’ as larger issues are tackled 

The CCCS' decision could have wider implications, with Malaysia also saying this month that it was studying monopoly risks triggered by the merger of Grab and Uber.

Grab, which maintains that it operates in a market that is broader than private-hire and taxi-booking services, also said it has retained its pre-transaction pricing and driver commissions.

Its average fare per ride has also decreased by 3.4 per cent since acquiring Uber's Southeast Asia operations as a result of "improved network efficiency", it added.

Source: Reuters/CNA/na(hm)