Economy

Uber faces de-merger from Singapore competitor Grab after fare hike

July 06, 2018 20:15·
Uber sold its Southeast Asian business to its only competitor in the market in March Credit Bloomberg

Uber sold its Southeast Asian business to its only competitor in the market in March Credit Bloomberg

But Singapore's competition commission has claimed that the deal was closed before it could finish an anti-competition probe and it has now found that the deal created a monopoly in the ride-hailing market, with Grab raising fares after the merger was completed.

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.

The commission "may require the parties to unwind the transaction unless the aforesaid public consultation confirms that any of the proposed remedies, or any further remedies, are sufficient to address the identified competition concerns, and are implementable in practice", it said in a statement.

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.

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

In return for selling its Southeast Asian ride-hailing and food operations, California-headquartered Uber received a 27.5 percent stake in Grab.

The Land Transport Authority (LTA) in a statement on Thursday said it supported the proposed infringement decision issued by the CCCS.

However, it stressed that it is now seeking public feedback on whether unwinding would resolve competition concerns caused by the merger and restore competition in the Platform Market, if practical issues would arise as well as the "proportionality of any unwinding remedy". CCCS also said remedial measures could include a sale by Grab of its leasing unit.

Iranian general blames drought on Israeli ‘cloud theft’
He claimed these countries had affected the climate with their technologies. Iran's own meteorological service struck a skeptical note, however.

"I don't think unwinding (in a traditional sense) is going to happen, because I just don't see a practical way for it to happen", said Walter Theseira, an economics professor at the Singapore University of Social Sciences.

Some analysts said unwinding could take different forms.

"The difficulty that small start-ups such as Ryde have had will not go away simply because exclusivity arrangements are removed from Grab drivers", he said.

"It doesn't have to be a total unwinding". Instead, they went ahead "despite their own view that the outcome would be irreversible, thus rendering it practically impossible to restore the status quo".

Its investigations also revealed the parties had even provided for a mechanism to apportion eventual antitrust financial penalties.

In its findings, the CCCS said cab-booking services do not offer enough competition, as they account for less than 15 per cent of the ride-hailing market.

"While we are one of the most visible players in transport, we are not the only player in the market". Indonesia's dominant player Go-Jek has also said it would launch services in Singapore.

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