SINGAPORE: The proposed acquisition of Trans-Cab, the third-largest taxi operator in Singapore, by the prominent ride-hailing company Grab has drawn attention from the Competition and Consumer Commission of Singapore (CCCS), which expressed apprehensions about the potential consequences.
On Monday (16 Oct), CCCS confirmed the completion of the initial phase of the assessment.
This phase involved a thorough examination of the information furnished by Grab and Trans-Cab, in addition to the input gathered from industry stakeholders and the general public.
Following this preliminary scrutiny, CCCS noted its inability to determine conclusively that the proposed acquisition would not significantly hamper competition.
“CCCS is unable to conclude at the end of its Phase 1 review that the Proposed Acquisition does not give rise to any competition concerns. ”
“CCCS has raised competition concerns with the Parties on the Proposed Acquisition, based on information received from the Parties and third-party feedback from industry players and members of the public during the Phase 1 review.”
CCCS underscored that the feedback it received highlighted apprehensions regarding the potential impact of Grab’s ownership of the Trans-Cab fleet on the ability of Trans-Cab drivers to utilize competing ride-hailing platforms.
This observation was made despite the existing regulation that prohibits licensed ride-hailing operators from enforcing exclusive arrangements that would prevent their drivers from engaging with rival companies under the point-to-point transport regulatory framework.
“Accordingly, CCCS needs to review the competition effects of the proposed acquisition in greater detail.”
The commission further indicated that Grab and Trans-Cab could potentially propose commitments to address the identified concerns related to competition.
These commitments are intended to rectify, alleviate, or prevent any substantial decline in competition or adverse consequences arising from the merger.
“Otherwise, CCCS will proceed to a more in-depth Phase 2 review of the Proposed Acquisition upon CCCS’s receipt of the relevant documents from the Parties. Commitments may also be offered at any time during a Phase 2 review.”
On 20 July this year, Grab announced that Grab Rentals Pte. Ltd., a subsidiary of Grab, will be acquiring 100% of the shares in Trans-cab, propelling the company’s growth and bolstering its driver base.
The acquisition is spearheaded by GrabRentals, which is Grab’s car rental division and encompasses approximately 2,200 cabs and over 300 private-hire vehicles owned by Trans-Cab.
The initial review of the deal by CCCS commenced on August 7, with the solicitation of public opinions beginning a week later.
In their submissions to the commission, Grab and Trans-Cab asserted that the merger would not significantly diminish competition in the platform and ride-hailing rental markets.
They cited minimal overlaps between the two companies, driver freedom to use any ride-hailing platform, and the anticipated lack of substantial growth in the number of drivers on Grab’s app post-acquisition.
A Grab spokeswoman stated on Monday that both Grab and Trans-Cab are dedicated to ensuring that the proposed deal benefits commuters and contributes to an overall improvement in the standards of the point-to-point transport industry.
According to her, the digitization of Trans-Cab’s fleet would enhance driver productivity and the availability of taxis, ultimately making it easier for consumers to find rides and improving driver earnings.
Grab emphasized its commitment to adhere to regulations promoting open competition and prohibiting anti-competitive conduct, including the prohibition of exclusive arrangements for drivers.
“This means that Trans-Cab drivers will continue to have the flexibility to earn through multiple ride-hailing platforms and pick up street-hail rides.”
Grab also expressed its focus on collaborating with CCCS to address the areas that require further examination.
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