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Grab: CCCS’s position on merger with Uber ‘overreaching’, against pro-business rules

FILE PHOTO: A man walks past a Grab office in Singapore
(Reuters file photo)

Local ride-hailing company Grab has called the Singapore competition watchdog’s provisional decision against its merger with Uber as “overreaching” and going against the country’s pro-business rules.

Grab has considered the Competition and Consumer Commission of Singapore (CCCS)’s Proposed Infringement Decision (PID), but it disagreed with CCCS’s analysis and “narrow” definition of competition, the company’s spokesperson said in a statement on Thursday (5 July).

“While we are one of the most visible players in transport, we are not the only player in the market. CCCS has not taken into account the dynamic developments and intense competition going on over the past few months, from both new and incumbent taxi and ride-hailing players,” said the spokesperson.

Earlier on Thursday, CCCS said in a press release that it had provisionally found that the merger between Grab and Uber has led to a “substantial lessening of competition” in the ride-hailing market and proposed to fine both companies.

“The merged entity is likely to be able to increase prices and has in fact done so since the completion of the transaction,” added CCCS.

Grab had voluntarily informed CCCS before the deal was signed even though it was not required by law, the Grab spokesperson said.

On 26 March, the ride-hailing giants announced the merger, which saw Uber taking a 27.5 per cent stake in Grab along with a seat on the latter’s board.

Grab conducted the merger legally and complied fully with Singapore’s competition laws, the spokesperson said.

“We fully cooperated with CCCS throughout the course of their review, and had proactively proposed voluntary commitments over and above the Interim Measures Directions (IMDs), to ensure consumers’ and drivers’ interests are taken care of, which CCCS had rejected,” the spokesperson added.

All areas of CCCS’s IMDs were complied with including maintaining base fare levels, surge factor and driver commission rates, according to the spokesperson.

Grab will submit its written representations to CCCS before the deadline and take steps to appeal against the provisional decision, the spokesman said.

CCCS has outlined a set of proposed remedies in relation to the merger and called for members of the public to give their submissions on these remedies by 19 July.

Among the remedies, CCCS proposed that Grab remove its exclusivity obligations imposed on drivers who drive on its platform, and the maintenance of its pricing algorithm prior to the merger.

Depending on the outcome of the public consultation, CCCS may require Grab and Uber to unwind the merger.

Both companies have 15 working days from the receipt of the PID to make their representations to CCCS, following which the commission will make its final decision.

Yahoo News Singapore has reached out to Uber for its response.

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