Players in the ride-hailing scene have joined the conversation surrounding a consumer watchdog’s recentÂ provisional findingsÂ thatÂ Grabâs buyout of Uber had âlessened competitionâ. 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 CCCSâ decision was “overreaching and goes against Singapore’s pro-innovation and pro-business regulations in a free market economy”.
âIn truth, the merger is detrimental to innovation for Singaporeâs ride-hailing industry,â 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 Grabâs 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 Grabâs 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 âsignal CCCSâs resolveâ in stamping out anti-competitive practices in Singapore. In addition, the financial penalty should also annul the ââsupposedâ financial gainâ which resulted from the merger, Rydeâs letter added. Doing so would deter future errant companies with similar intentions in ride-hailing and in other industries.
âAnything less would not be an appropriate censure,â 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 âreverseâ 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 âsuffocation of other applicationsâ.
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 CCCSâ recent provisional findings that theÂ sale of Uberâs Southeast Asian business toÂ Grab earlier this year had led to a âsubstantial lessening of competitionâ 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 otherâs closest competitor.
CCCS also proposed theÂ imposition of financial penalties upon Grab and Uber respectively, as both parties carried out the sale despite having anticipated potential competition concerns and caused aÂ substantial lessening of competition within Singaporeâs ride-hailing service platform market.
Grab has also since hit back at the CCCSâ findings, confirming that it âdisagreedâ with the latterâs analysis, adding that âThe CCCS appears to have taken a very narrow approach in defining competition.â It added that while Grab is one of the most visible players in transport, it is not the only player in the market.
âThis provisional decision and proposed remedies are overreaching and go against Singaporeâs pro-innovation and pro-business regulations in a free market economy,â 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, CCCSÂ banned Grab from taking overÂ operational data from Uber, which can be used to enhance its market positionÂ post-mergerÂ talks against other transport providers such as ComfortDelGro. This includes data such as historical trip data, the watchdog said.