Competition watchdog lifts measures on Grab as private-hire regulatory framework takes effect
SINGAPORE: The Competition and Consumer Commission of Singapore (CCCS) has lifted the measures it imposed on Grab in September 2018 over its merger with Uber.
This comes after Singapore’s new point-to-point (P2P) transport regulatory framework came into effect on Oct 30, the watchdog said in a media release on Friday (Nov 20).
Parliament passed the P2P Passenger Transport Industry Bill in August last year, which requires all ride-hail and street-hail service providers with a fleet size of more than 800 vehicles to be licensed.
READ: Private-hire car operators to be licensed from next year as Parliament passes new regulatory framework
Amid the COVID-19 outbreak, implementation of the regulatory framework was delayed from June to October this year to allow operators more time to prepare their applications.
Since the launch of the framework, companies such as Tada Mobility, Gojek, Grab, ComfortDelgro and Ryde have been awarded ride-hail service operator licences, CCCS said.
Other existing taxi operators have also been issued limited ride-hail service operator licences to provide call booking services.
“As a result, there are a number of operators in the P2P sector today. The P2P regulatory framework administered by the Land Transport Authority and the Public Transport Council ensures that all licensed operators cannot prevent their drivers from driving for other operators,” CCCS said.
“The regulatory framework also ensures that P2P fares are transparent and clearly communicated to commuters, while leaving fare levels to be determined by market forces.
“With a sectoral regulatory framework now in place, CCCS considers it timely to release the directions imposed on Grab as the issues identified are more appropriately considered and addressed within the context of the sectoral regulatory framework,” the commission said.
CCCS issued an infringement decision against Grab and Uber in September 2018, in relation to the March sale of Uber’s Southeast Asian business to Grab for a 27.5 per cent stake in the Singapore-based firm.
The deal led to a “substantial lessening of competition” in the ride-hailing market, CCCS said then, highlighting Grab’s increased prices and changes to its loyalty programme after the merger.
It issued directions to both firms to address these concerns, under which Grab must maintain its pre-merger pricing, pricing policies and product options, and remove all exclusivity obligations on drivers and taxi fleets.
These sought to lessen the impact of the deal on drivers and riders, and keep the market open and contestable, CCCS said.
Uber and Grab were together also fined a total of S$13 million over their merger. CCCS said the penalties were imposed to “deter completed, irreversible mergers that harm competition”.
On Friday, CCCS noted that Grab submitted an application in July to impose a S$0.30 platform fee for ride-hailing services.
The commission said it would no longer issue a decision on the application, after the lifting of the directions imposed on Grab.
In a statement Grab said it welcomed the CCCS decision, adding that it is committed to adhering to the requirements of the new regulatory framework.
Grab hopes to roll out the new platform fee within the next few months, said Grab Singapore's managing director for transport Andrew Chan, noting the fee would allow it to "maintain and improve safety measures, cover other relevant operating costs as well as look after our driver-partners’ welfare sustainably".
"This introduction of a platform fee will be the only change we will be making to our fares for the time being. Otherwise, we are committed to maintain the current pricing structure and policies for at least the next six months given the COVID-19 situation," he said, adding that Grab would be "prudent" with its pricing structures and policies.
The National Private Hire Vehicles Association (NPHVA), which represents the interests of private-hire drivers, said it looked forward to continue working closely with Grab regarding the welfare of drivers as well as the sustainability of their income.
"Ultimately, NPHVA is of the view that drivers’ income has to be fair and any fare adjustment or commission fees levied should be reasonable and can better the livelihoods of drivers," said the association in a Facebook post.
National Trades Union Congress (NTUC) director Yeo Wan Ling said NTUC would support NPHVA in its discussions with Grab to ensure a "continued balance of interest amongst our commuters, drivers and company".
"In the long run, we want to ensure that our drivers' livelihood are not unfavourably affected by fare adjustments or changes. We look forward to working closely with Grab and all parties so that our drivers can be stakeholders and true 'driver partners' of Grab," said Ms Yeo.