The merger between ride-hailing platforms, Grab and Uber earlier this year may have resulted in the infringement of the Competition Act in Singapore, as announced by the Competition & Consumer Commission (CCCS) Singapore.
Investigations by the competition watchdog resulted in a transaction that led to a substantial lessening of competition revelation among ride-hailing platform services in the country. Both ride-hailing platforms, Grab and Uber faces fines of S$6.4million and S$6.58 million respectively, amounting to a staggering total of over S$13 million.
The competition watchdog also mentioned in its press release that there were numerous complaints pouring from both riders and drivers on the hike in fares by Grab post-transaction, as seen in the decrease in the amount and frequency of driver promotions and incentives.
CCCS highlighted that Uber would have continued its operations in the country while exploring other commercial options. The watchdog also announced several measures to lessen the impact of the merger deal and to open the market to other ride-hailing platforms. This was due to Grab’s 80% share of the ride-hailing market causing other small players’ market share to remain insignificant after Uber’s exit.
It ordered Grab to remove exclusivity arrangements with drivers and taxi fleets, and to maintain its pre-merger pricing algorithm and driver commission rates. Uber was also ordered to sell cars under its vehicle leasing business Lion City Rentals to any potential competitor and further prohibited the platform from selling the vehicles to Grab without approval.
Both Grab and Uber found the decision by CCCS to be an “inappropriately narrow definition of the market” and would consider appealing as Grab believes the transaction was made under legal rights and no competition laws was intentionally breached.