Players in the ride-hailing scene have joined the conversation surrounding a consumer watchdog’s recentĀ provisional findingsĀ thatĀ Grabās buyout of Uber had ālessened competitionā. Echoing the sentiment that the merger decreased competition was Ryde which told the Competition and Consumer Commission of Singapore (CCCS) that it disagreed with Grab’s statement to the findings that CCCSā decision was “overreaching and goes against Singapore’s pro-innovation and pro-business regulations in a free market economy”.
āIn truth, the merger is detrimental to innovation for Singaporeās ride-hailing industry,ā the open letter read. Ryde added that while the proposed remedies do not go far enough, it is a step in the right direction to mitigate negative post-merger effects.
These remedies include financial penalties and the proposing the removal of Grabās exclusivity arrangement with any taxi or chauffeured private hire car fleet to increase consumer and driver choice. Exclusivity obligations such as lock-in periods or termination fees were also tackled, along with the maintenance of Grabās pre-transaction pricing algorithm and driver commission rates prior to the merger with Uber.
It added that in the event that the merger cannot be unwound, imposition of a meaningful and substantial financial penalty on the relevant parties would āsignal CCCSās resolveā in stamping out anti-competitive practices in Singapore. In addition, the financial penalty should also annul the āāsupposedā financial gainā which resulted from the merger, Rydeās letter added. Doing so would deter future errant companies with similar intentions in ride-hailing and in other industries.
āAnything less would not be an appropriate censure,ā the statement sent to Marketing added.
In a statement to The Straits Times, Terence Zou, CEO and founder of Ryde, added that the measures proposed by CCCS which includes a fine did not define how much the fine should be, and needed to be significant in order to āreverseā the unfairness and having meaning. He added that the proposed measures are well directed to help alleviate post-merger consequences on the ride-sharing market to ensure it remains competitive. This includes disallowing exclusive contracts between Grab, taxi companies and drivers, which Zou added is the most important move to practice to prevent āsuffocation of other applicationsā.
Meanwhile, similarly, a spokesperson for taxi company Trans-Cab Services also said the removal of exclusive contracts would help drivers and the industry. This is because drivers will be able to use the applications which allot them the maximum benefits.
The move comes on the back of CCCSā recent provisional findings that theĀ sale of Uberās Southeast Asian business toĀ Grab earlier this year had led to a āsubstantial lessening of competitionā in ride-hailing platform services. According to the news release, CCCS determined that the sale has removed competition between Grab and Uber, which were each otherās closest competitor.
CCCS also proposed theĀ imposition of financial penalties upon Grab and Uber respectively, as both parties carried out the sale despite having anticipated potential competition concerns and caused aĀ substantial lessening of competition within Singaporeās ride-hailing service platform market.
Grab has also since hit back at the CCCSā findings, confirming that it ādisagreedā with the latterās analysis, adding that āThe CCCS appears to have taken a very narrow approach in defining competition.ā It added that while Grab is one of the most visible players in transport, it is not the only player in the market.
āThis provisional decision and proposed remedies are overreaching and go against Singaporeās pro-innovation and pro-business regulations in a free market economy,ā Grab said in a statement to Marketing at the time. The spokesperson added that Grab will submit its written representations to the CCCS before the deadline, and will take all appropriate steps to appeal against this decision.
In April this year, CCCSĀ banned Grab from taking overĀ operational data from Uber, which can be used to enhance its market positionĀ post-mergerĀ talks against other transport providers such as ComfortDelGro. This includes data such as historical trip data, the watchdog said.