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Malaysian govt to investigate monopoly risk post Grab-Uber merger?

Malaysia’s Land Public Transport Commission (SPAD) is requiring all ride-hailing companies to register with it and comply with a set of regulations beginning today. According to minister of transport, Anthony Loke, this is in a bid to regulate the industry to offer equal opportunities for Malaysia’s taxi industry and ride-hailing operators, the New Straits Times reported.

Some of the regulations enforced include applying for a licence, which will require ride-hailing companies registering with the Companies Commission of Malaysia and the Cooperative Commission of Malaysia. Other regulations include conditions for driver worthiness, conditions for vehicles and conditions for operation. Loke added that a one-year grace period will be given from the date of enforcement to allow ride-hailing companies to abide by the conditions. Nonetheless, the ministry will still closely monitor companies during the period and take action against those that do not comply, NST stated.

About 10 e-hailing companies are currently present in Malaysia, including Grab, MyCar, Blacklane and Decentralised Alternative Cabs Serving and Empowering Everyone.

Multiple media reports also stated that the government is reviewing monopoly risk in Malaysia’s ride hailing industry following Grab’s acquisition of Uber earlier this year. This comes after SPAD received numerous complaints on Grab raising its fares since the merger.

In response, Grab Malaysia said it is looking to work closely with the government to “improve and elevate” the standards of local land public transportation infrastructure and services. According to country head Sean Goh, the company was recently alerted of the regulatory suggestions and have yet to receive the formal operational directive.

“As part of the industry we hoped that we, like other players in the market, were consulted earlier on as it does affect hundreds of thousands of drivers across the country,” Goh said, noting the government’s “progressive” stance in improving the quality and coverage of Malaysia’s public transport industry. He also said Grab looks forward to actively engaging in open dialogue with Loke and his team to clarify and smoothen out details of the new regulations introduced. This is in a bid to ensure “minimal interruptions” to Grab’s driver-partners, operations and processes.

“Regardless, we will assist our driver-partners through this transition and keep them updated on any developments, as it does affect their welfare and livelihood,” he added. He also urged driver-partners to bear with the company as it works with the government to better understand the regulations and work out the best solutions that will minimise impact on them.

Across the border, the Competition and Consumer Commission of Singapore (CCCS) said last week that it has provisionally found that the sale of Uber’s Southeast Asian business to Grab earlier this year has led to a “substantial lessening of competition” in ride-hailing platform services.  CCCS determined that the sale has removed competition between Grab and Uber, which were each other’s closest competitor.

“The merged entity is likely to be able to increase prices and has in fact done so since the completion of the transaction,” the statement said. It added that Grab and Uber have not been able to show that the transaction gives rise to efficiencies that would outweigh the harm to competition. CCCS has also proposed the imposition of financial penalties upon Grab and Uber respectively.

Meanwhile, Grab Singapore’s spokesperson told A+M then that it has considered the CCCS’ Proposed Infringement Decision and disagrees with its analysis, adding that the competition commission “appears to have taken a very narrow approach in defining competition”.

Read also:
GrabPay hits Malaysia market
Ryde calls Grab-Uber merger ‘detrimental’ to innovation for ride-hailing industry
Media Prima and Grab tie-up for in-car entertainment
Grab to become more integrated, expands mobile wallet
GrabFood running in beta version in Singapore and Malaysia
Grab confirms cutting down on discounts: A swerve into the right lane?
Grab and MDEC tie-up to better manage KL’s traffic situation using AI
Competition watchdog bars Grab from accessing Uber’s operational data
Grab-Uber merger: Did internal communications fall short?
Grab says less than 20% of former Uber SEA staff no longer with company
Grab unveils new ad to push ‘everyday app’ position

(Photo courtesy: 123RF)

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