16-10-2023 (SINGAPORE) Singapore’s competition watchdog, the Competition and Consumer Commission of Singapore (CCCS), has expressed concerns regarding tech firm Grab’s proposed acquisition of Trans-cab, suggesting that it could influence how drivers employed by the taxi operator use other ride-hailing platforms. CCCS noted that such an arrangement could potentially create barriers to entry for competing platforms, given the importance of scale within the industry.
These concerns come despite Singapore’s regulatory framework, which does not permit licensed ride-hail operators to enforce exclusive arrangements preventing their drivers from using other platforms. The proposed merger, initially announced in July, would see Grab Rentals, Grab’s private-hire car rental arm, acquiring 100% of Trans-cab’s shares. Trans-cab is Singapore’s third-largest taxi operator, with a fleet of over 2,500 vehicles. Both Grab and Trans-cab anticipate the deal closing in the fourth quarter of 2023, pending regulatory approvals and standard closing conditions.
In August, CCCS sought public feedback to assess how the merger might impact the price, quality, and quantity of street- and ride-hailing services provided by taxi and private-hire car drivers. Both Grab and Trans-cab have defended the acquisition, asserting that it will not significantly diminish competition, citing minimal overlaps between the two entities, the absence of prohibitive entry barriers, and a highly competitive rental market.
However, CCCS announced on Monday that after an initial review, it could not conclusively determine that the proposed acquisition would not result in competition concerns. The watchdog has communicated these concerns to Grab and Trans-cab and will undertake a more thorough review of the potential competition effects of the acquisition.
At this stage, the parties involved may offer “commitments” to address the competition concerns, such as measures to remedy, mitigate, or prevent any adverse effects resulting from the merger. Alternatively, if no commitments are presented, CCCS will proceed with a detailed review of the acquisition.
Grab’s proposed acquisition of Trans-cab follows the merger of Strides Taxi and Premier Taxis in May, forming Singapore’s second-largest taxi operator. In 2018, CCCS imposed a fine of SGD 13 million on Grab and ride-hailing platform Uber due to competition concerns arising from their merger, which led to higher prices and alterations to Grab’s loyalty program after its acquisition of Uber’s Southeast Asia operations.
