Singapore fines Grab, Uber US$9.5M over its merger deal | Digital Asia
Digital Asia News Update
The Competition and Consumer Commission of Singapore (CCCS) announced that it has fined ride-hailing companies Grab and Uber a total of S$13 million (US$9.5 million) over their merger in March, with Uber being fined for S$6.58 million (US$4.8 million) while Grab was being fined for S$6.42 million (US$4.7 million).
According to a report by Channel News Asia, the business competition watchdog said that the deals has led to “substantial eroding” of competition in the ride-hailing market.
The penalties were then imposed to “deter completed, irreversible mergers that harm competition”.
CCCS also ordered Grab to remove exclusivity arrangement with drivers and taxi fleets, as well as to maintain its pre-merger pricing algorithm and driver commission rates, following complaints from both drivers and customers.
Its investigation revealed that Grab has increased its trip fares and net of rider promotions between 10 to 15 per cent after the merger deal.
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It has also required Uber to sell the cars under Lion City Rentals, its vehicle rental unit, to any potential competitor with a “reasonable” offer.
Commenting on the decision, Lim Kell Jay, Head of Grab Singapore, said that the company has been working with CCCS during its review over the past few months, and that it is “glad” the investigation has been completed and did not require the transaction to be unwound.
It also stressed that the company did not “intentionally or negligently” breach competition laws.
“Grab agrees that keeping the market open and contestable is best for consumers and drivers, and we will abide by the remedies set out by the CCCS. However, it is unfortunate that the CCCS is taking a very narrow market definition in arriving at its conclusion that the Transaction has led to a substantial lessening of competition. Commuters are free to choose between street-hail taxis and private hire cars, and it is a fact that private-hire car drivers’ incomes are directly impacted by intense competition with street-hail taxis,” Lim explained in a press statement.
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“We recognise that the CCCS’s position on non-exclusivity arrangements is to set the right tone for the transport industry. Grab agrees with, and has long advocated for, industry-wide regulations that allow drivers to freely choose which platform or operator they wish to drive with. For drivers to have full maximum choice, all transport players, including taxi operators, should also be subjected to non-exclusivity conditions. We will continue our dialogue with the CCCS and the Land Transport Authority (LTA) to create a level playing field for all,” he continued.
He also stated that Grab has not raised its fares since the transaction, and will continue to adhere to its pre-transaction pricing model, pricing policies and driver commissions.
“We have been and will continue to submit weekly pricing data to the CCCS for monitoring,” he said.
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