Singapore fines Grab, Uber RM39 million for merger

Singapore watchdog fines Grab, Uber US$9.5 million over merger

SINGAPORE's consumer watchdog today fined ride-hailing firms Grab and Uber almost S$13 million (RM39 million) for their merger in March previous year, the Straits Times reports.

Fining Uber S$6.6 million and Grab S$6.4 million, the regulator said effective fares on Grab rose 10 to 15 percent after the deal, and that the firm now holds a Singapore market share of around 80 percent.

The latest directions include ensuring that Grab drivers are not required to use Grab exclusively; removing Grab's exclusivity arrangements with any taxi fleet in Singapore; and requiring Uber to sell the vehicles of Lion City Rentals to any potential competitor who makes a reasonable offer, or to Grab but only with CCCS's approval.

In March, the ride-hailing landscape in Southeast Asia changed drastically after Grab announced its merger with Uber.

According to Reuters, the CCCS launched an investigation into the Uber-Grab merger just days after the deal was done.

This comes as CCCS concluded its investigations on the Grab-Uber sale, and said that the sale has infringed section 54 of the Competition Act.

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Grab said it completed the deal within its legal rights, and did not intentionally or negligently breach competition laws.

The time has come for Uber and Grab to face the wrath of Singapore's competition regulator.

In levying the fines, CCCS said that it considered both companies' turnovers, the nature, duration and seriousness of the infringement, and aggravating as well as mitigating factors such as if both parties were cooperative. It said commuters remained free to choose between street-hail taxis and private hire cars and that it "advocated" regulations that enabled drivers to freely choose the platform on which they drove.

In its response, Grab described CCCS's decision as "unfortunate" and assuming a "very narrow market definition". Despite not operating in the country yet, the company made a statement saying it welcomed the CCCS' decision and that it was "encouraged to see the measures being taken to level the playing field". We also note that the LTA is reviewing the regulatory framework for the point-to-point transportation sector, which we hope will address non-exclusivity across the industry. Grab's pre-merger pricing algorithm and driver commission rates also must be maintained, in order to protect riders' interests against excessive price surges and drivers' against spikes in commissions owed to Grab. For example, we are studying data and vehicle-sharing services to play our part to optimise Singapore's overall transport network.

In the Philippines, the competition watchdog last month approved the merger but imposed conditions related to areas including pricing and exclusivity arrangements to prevent Grab acting like a monopoly.

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