ComfortDelGro has revealed plans to acquire 51% of Lion City Rentals (LCR), Uber’s wholly-owned car rental subsidiary in Singapore. The deal is valued at about SG$642 million, with a cash consideration of SG$295 million, ranking as ComfortDelGro’s single largest deal to-date, according to a press statement.
According to a memo written by Brooks Entwistle, chief business officer of Uber’s business in Asia Pacific, the move will not affect the branding of both companies. This will see the Uber and ComfortDelGro brands and mobile applications continuing to operate independently.
Uber will retain a 49% ownership stake in LCR, maintaining a very active role in the company. This is in addition to holding three of the seven seats on LCR’s board. LCR currently has fleet of about 14,000 vehicles. Upon completion of the transaction, LCR will be able to benefit from ComfortDelGro’s fleet management and operations. It will also create a path for ComfortDelGro’s taxi drivers to receive ride requests on the Uber driver app.
This is with the aim to increase their potential earnings while providing users of the Uber app an opportunity to directly book a ComfortDelGro taxi. The press statement added that the two companies are finalising additional partnership opportunities and will make further announcements in the upcoming months. The transaction is expected to result in increased demand for both private hire and taxi drivers as well as increased choice, shorter waiting times, and greater reliability for consumers.
“ComfortDelGro shares our vision for the future of urban mobility, and with this joint venture Comfort and Uber can accelerate this shared vision of the future, powered by technology that unlocks the true potential of Singapore, for everyone, everywhere,” Entwistle added.
“By working together, we will be able to benefit from each other’s strengths. Uber will benefit from our fleet maintenance and management capabilities while we will benefit from Uber’s world class technology. At the same time, consumers will have even more choice with either taxis or private hire vehicles, shorter waiting times and greater reliability. It’s a win-win situation,” ComfortDelGro CEO, Yang Ban Seng, said.
News of the potential tie-up first emerged in August, which saw ComfortDelGro Corporation signing an “exclusivity letter” with Uber. The talks were regarding the formation of a “potential strategic alliance” for the management of fleet vehicles, and booking software solutions in Singapore.
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