Ryde agrees with watchdog's finding that Grab-Uber merger infringed competition laws
SINGAPORE - Ride-hailing firms have agreed with a competition watchdog's finding that Grab's acquisition of Uber's South-east Asian business infringed competition laws.
Mr Terence Zou, chief executive officer and founder of Ryde, a local point-to-point transport application, said the decision by the Competition and Consumer Commission of Singapore (CCCS) was a step in the right direction.
He said the merger between Grab and Uber, which was unfair, had already been done, and was "practically speaking" not possible to be undone.
The CCCS, in a statement on Thursday (July 5), proposed imposing remedial measures, including fines,on Grab to revive dwindling competition in the point-to-point transport services industry in Singapore.
Mr Zou said: "The measures fell short of defining a fee. The fine cannot be just token, it needs to be substantial in order to 'reverse' the unfairness and be meaningful."
Ryde also said: "The proposed remedies do not go far enough but are a step in the right direction to mitigate negative post-merger effects and ensure that the market remains contestable."
Mr Zou said that, of all the measures, the one disallowing exclusive contracts between Grab and drivers or taxi companies is the most important measure to implement, as it will prevent the suffocation of other applications.
The founder and chief executive officer of another point-to-point transport application, MVL, which is slated to launch in Singapore at end-July, also agreed the decision was a step in the right decision.
Mr Kay Woo said: "Preventing the use of exclusive agreements will allow competitors to actually take some market share, and participate in the competition. With exclusive contracts, it is hard to gain the necessary critical mass to even participate.
"It will also allow drivers to earn more because they now have more options to choose from."
Local taxi company Trans-Cab Services also agreed that the removal of exclusive contracts will benefit their drivers and the market in general.
A spokesman said: "For drivers, being able to switch and choose between the applications means they will likely find it easier to earn a better living, as they can use the applications that can give them the most benefits."
In justifying that exclusive contracts be removed, the CCCS said in a release on Friday (July 6): "The removal of exclusivity will allow potential competitors access to an adequate number of cars and drivers in order to compete effectively."
In a contestable market, there will be more choices for both riders and drivers.
The organisation also justified the remaining measures.
CCCS said the proposed remedy on maintaining Grab's pre-merger pricing algorithm is to protect riders from higher base fares and surge factors.
This means that Grab will not be allowed to increase these elements from the pre-merger prices.
The local competition watchdog also explained the rationale behind the decision to compel Uber to sell Lion City Rentals wholly or partly to any potential competitor, and not be sold to Grab without CCCS approval.
It said that allowing competitors to have access to the cars and drivers from Lion City Rentals is in response to feedback from other point-to-point transport services .
They would have difficulty entering and competing in the Singapore market if Grab can expand its network of vehicles and drivers through acquiring Lion City Rentals' assets and drivers.
"They have also fed back that access to an adequate number of cars and drivers is required for them to compete effectively," said CCCS.
"CCCS's proposed direction addresses these concerns to facilitate new entry and in turn provide more choices for both riders and drivers."
The watchdog body has, however, kept the concerns of Uber and Grab in mind.
It said: "Further, CCCS's proposed directions in relation to Lion City Rentals also seek to balance the interest of different stakeholders, ie, Uber is not required to sell Lion City Rentals or its assets unless a reasonable offer is made by a potential competitor, while Grab may purchase Lion City Rentals or its assets if it obtains CCCS's prior approval."
https://www.straitstimes.com/singap...g-that-grab-uber-merger-infringed-competition