Hot on the heels of being slapped with SG$6.42 million fine by the Competition and Consumer Commission of Singapore (CCCS), Grab has maintained that it did not “intentionally or negligently” breach competition laws. The company said that it was glad the decision did not require for the merger transaction to be unwound. Lim Kell Jay, head of Grab Singapore, added Grab agrees that keeping the market open and contestable is best for consumers and drivers, and will abide by the remedies set out by the CCCS.
Uber also received financial penalty of SG$6.58 million. CCCS said that the penalties were imposed to “deter completed, irreversible mergers that harm competition”. In levying the fines, CCCS said that it considered both companies’ turnovers, the nature, duration and seriousness of the infringement, and aggravating as well as mitigating factors such as if both parties were cooperative.
Similar to a previous statement said on CCCS’ investigation, Lim said it is “unfortunate” that the CCCS is taking “a very narrow market definition” in arriving at its conclusion that the transaction has led to a substantial lessening of competition. He added that commuters are free to choose between street-hail taxis and private hire cars, and “it is a fact” that private-hire car drivers’ incomes are directly impacted by intense competition with street-hail taxis.
Lim also added that Grab has not raised fares since the transaction and will continue to adhere to the pre-transaction pricing model, pricing policies and driver commissions. This includes submitting a weekly pricing data to the CCCS for monitoring. He said although Grab agrees with industry-wide regulations that allow drivers to freely choose which platform or operator they wish to drive with, drivers require “full maximum choice”.
“All transport players, including taxi operators, should also be subjected to non-exclusivity conditions,” Lim added. He said that Grab will take this up with the CCCS and the Land Transport Authority (LTA) in a bid to create a level playing field for all. As LTA is also reviewing the regulatory framework for the point-to-point transportation sector, Lim said that he hopes non-exclusivity across the industry will be addressed.
CCCS concluded its investigations on the Grab-Uber sale back in July and said that the sale infringed section 54 of the Competition Act. The section prohibits mergers that have resulted, or may be expected to result, in a substantial lessening of competition in Singapore. At that time of its conclusion, CCCS issued directions to lessen the impact of the deal on drivers and riders, and to open up the market and level the playing field. It had proposed the removal of Grab’s exclusivity arrangement with any taxi or chauffeured private hire car fleet in Singapore.
Most recently, Grab launched an advertising business unit called GrabAds, in a bid to provide brands with an online-to-offline (O2O) platform to engage with millions of Southeast Asian consumers. The advertising platform, GrabAds marries an extensive on-ground fleet of vehicles with digital presence across eight countries and more than 200 cities in Southeast Asia.
It allows brands to distribute appealing content and create in-car and digital experiences for consumers. The new initiative also aims to provide additional revenue streams for driver-partners and delivery-partners who have full flexibility in choosing their preferred advertising option to best complement their driving income.
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