Uber’s exit from Southeast Asia may be done and dusted, however the deal — which noticed Grab take over its native operations in change for a 27.5 % stake — is coming stress in Singapore the place the nation’s antitrust regulator has threatened to unwind the deal as a result of it has lowered competitors.
The Competition and Consumer Commission Singapore (CCCS) in the present day announced the results of a three-month investigation into the deal and its provisional findings provide some pretty scathing conclusions.
Primarily, CCCS stated that Uber and Grab “have not been able to show that the transaction gives rise to efficiencies that would outweigh the harm to competition.”
In extra particular element, it stated that “taxi booking services pose an insufficient competitive constraint.” The group voiced concern that new ride-hailing entrants are considerably deprived as a result of require a “significant amount of upfront capital” to compete and, even then, they have to battle current networks that favor bigger organizations.
The fee claimed Grab has already taken benefit of its dominant place by elevating costs, though that’s one thing that Grab denies doing. Furthermore, CCCS additionally expressed concern that Grab’s service will stagnate if it isn’t challenged by rivals within the ride-hailing house.
“Without sufficient competition post-transaction, Grab would be able to raise fares for riders and commission rates for drivers, lower the quality of its services and reduce innovating its product offerings,” CCCS wrote in its findings.
Grab criticized the report for taking “a very narrow approach in defining competition.”
“While we are one of the most visible players in transport, we are not the only player in the market. CCCS has not taken into account the dynamic developments and intense competition going on over the past few months, from both new and incumbent taxi and ride-hailing players,” the corporate addd in a press release.
As a subsequent step, CCCS has requested Grab to revive its pre-deal pricing and fee charges, reduce exclusivity agreements with taxi operators, and take away lock-in for drivers that use its rental companions or Uber’s Lion City Rentals enterprise.
The deal is, after all, long-since closed however the group has threatened that it may unwind the transaction in Singapore or hit each Uber and Grab with fines.
The initial Singapore investigation pushed the closure of Uber’s Southeast Asia service again by one month, whereas it was extended by a week in the Philippines. Uber’s service lined a complete of seven markets, however this motion from CCCS would solely impression Singapore.
Here’s Grab assertion in full:
We have thought of the CCCS’ Proposed Infringement Decision and disagree with their evaluation. The CCCS seems to have taken a really slim strategy in defining competitors. While we’re one of the crucial seen gamers in transport, we’re not the one participant available in the market. CCCS has not taken under consideration the dynamic developments and intense competitors happening over the previous few months, from each new and incumbent taxi and ride-hailing gamers.
Even although not required by the regulation, we had knowledgeable the CCCS that we have been making a voluntary notification, in addition to proactively engaged with the CCCS earlier than the transaction was signed. We carried out the acquisition legally and in full compliance with Singapore’s relevant competitors legal guidelines.
We absolutely cooperated with the CCCS all through the course of their evaluate, and had proactively proposed voluntary commitments over and above the Interim Measures Directions (IMDs), to make sure shoppers’ and drivers’ pursuits are taken care of, which the CCCS had rejected. Grab has complied with all areas of CCCS’ IMDs together with sustaining base fare ranges, surge issue and driver fee charges.
This provisional choice and proposed cures are overreaching and go in opposition to Singapore’s pro-innovation and pro-business laws in a free market economic system. We word that the provisional choice isn’t closing nor efficient but, and we are going to submit our written representations to the CCCS earlier than the deadline. We will take all applicable steps to attraction in opposition to this choice.