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SG competition watchdog raises concerns over Grab and Trans-Cab takeover

SG competition watchdog raises concerns over Grab and Trans-Cab takeover

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Singapore's competition watchdog, the Competition and Consumer Commission of Singapore (CCCS) has completed phase one of its review of ride-hailing company Grab's proposed acquisition of Trans-Cab, according to a report seen by MARKETING-INTERACTIVE.

While the CCCS said that it was unable to conclude that the proposed takeover would not substantially affect competition, it raised concerns over the move’s potential to raise barriers for expansion and entry for rival platforms. The CCCS said that it also received concerns about the effect of Grab’s ownership of the Trans-cab fleet on Trans-cab drivers’ usage of rival ride-hail platforms.

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The concerns were highlighted despite licensed ride-hailing operators being barred from imposing exclusive arrangements that prevent their drivers from working for rival companies under the point-to-point transport regulatory framework.

"Third-party feedback received by CCCS suggests concerns on the effect of Grab’s ownership of the Trans-cab fleet on Trans-cab drivers’ usage of rival ride-hail platforms, which may raise barriers to expansion and entry for Grab’s rival ride-hail platforms, given the importance of scale in the ride-hail platform industry," said CCCS in a statement.  "Accordingly, CCCS needs to review the competition effects of the Proposed Acquisition in greater detail," it said. 

Feedback from both parties, industry players and members of the public were used in phase one of the review.

Moving forward, the CCCS will be reviewing the competition effects of the proposed acquisition in greater detail and have enabled both Grab and Trans-Cab to propose solutions to address potential competition concerns.

Grab will be working closely with the CCCS to address the areas that require further review, according to a Grab spokesperson in a statement to MARKETING-INTERACTIVE.

"Digitalising Trans-cab’s fleet will improve driver productivity and taxi availability so that consumers can get a ride more easily. This will also improve driver earnings," added the spokesperson.

The Grab spokesperson also explained that the company intends to abide by LTA’s point-to-point  Regulatory Framework where Trans-Cab drivers will continue to have the flexibility to earn through multiple ride-hailing platforms and pick up street hail rides.  

Grab proposed to acquire 100% of the shares in Trans-Cab in July this year. The acquisition includes Trans-Cab’s taxi and car rental business, maintenance workshop, and fuel pump operations as well as its combined taxi and private-hire-vehicle (PHV) fleet of more than 2,500 vehicles.

“Consumer behaviors have shifted and we’ve recognised for some time the need to digitise the business and ensure our taxi drivers can continue to be competitive. We are confident this deal protects their future,” said Jasmine Tan, general manager of Trans-Cab.

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