Singapore Imposes Fines, Restrictions Over Uber-Grab Deal

Darnell Taylor
September 24, 2018

As for whether it will appeal the decision, Grab told CNET in an email, "We will review the CCCS' final decision in detail before making a decision".

Grab added that the merger was within its legal rights and maintained it did not intentionally or negligently breach competition laws.

But Grab echoed its earlier sentiment toward the CCCS' "narrow" approach to its definition of competition.

"Grab agrees with, and has long advocated for, industry-wide regulations that allow drivers to freely choose which platform or operator they wish to drive with", Lim said. For drivers to have full maximum choice, all transport players, including taxi operators, should also be subjected to nonexclusivity conditions.

Pointing to the Land Transport Authority, it noted that the country's regulatory framework pertaining to point-to-point transport now was under review and it hoped this meant the non-exclusivity issue would be addressed. Have you experienced a rise in Grab fares in the past few months?

Grab is making every effort to serve our customers better and we are adding more app features that will improve the user experience for customers and drivers. This, though, then should apply to all market players, it noted.

Uber Technologies Inc [UBER.UL] sold its Southeast Asian business to bigger regional rival Grab in March in exchange for a 27.5 percent stake in the Singapore-based firm.

To be fair, while Singapore is ahead on the verdict, Malaysia also has Grab under the microscope since the announcement. Despite the fines, the Uber-Grab merger was not required to be unwound.

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However, the Competition and Consumer Commission of Singapore (CCCS) released a statement on the same day, stating that it was not informed of the merger.

But the deal invited regulatory scrutiny in the region, with the CCCS, in a rare move, launching a probe, just days after the transaction was announced.

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.

Uber was fined $6.5 million, while Grab was fined $6.4 million.

In addition to the financial penalties, the competition watchdog issued several remedies Grab must take to open up the market and level the playing field for new players as well as "lessen the impact of the [Uber] transaction" on drivers and riders.

The regulator said that, after the merger, Grab had 80% of the ride-hailing market in Singapore, and smaller competitors were struggling to do business-particularly as Grab hit taxi companies, car-rental companies and some drivers with exclusivity agreements.

Grab's fares also were found to have climbed between 10 percent and 15 percent following the Uber deal, said CCCS.

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