The merger of ride-sharing companies Grab and Uber's Southeast Asian operations has been found to impede market competition in Singapore and may be disbanded if proposed remedies are found to be insufficient.
Uber in March 2018 agreed to sell its regional business[1] to Grab--a transaction that was not made known to local competition watchdog, Competition and Consumer Commission of Singapore (CCCS), which later launched an investigation to assess a potential infringement[2] of the country's market competition laws.
The commission now has found the merger to have resulted in "a substantial lessening of competition" in Singapore's ride-hailing market.
"CCCS has provisionally found that the transaction has removed competition between Grab and Uber, which were each other's closest competitor. The merged entity is likely to be able to increase prices and has, in fact, done so since the completion of the transaction," it said in a statement[3] Thursday.
It noted that Uber would not have exited the market "in the near- to medium-term" had the transaction not come through, either continuing its operations or merging its Southeast Asian business with other players that were not its current competitions in Singapore.
It added that taxi booking services, accounting for 15 percent of the market, currently posed "insufficient" competition to the two companies. Furthermore, with Grab placing exclusivity conditions on taxi companies, car rental partners, as well as some of its own drivers, the Singapore competition watchdog said barriers to entry for potential market players were high.
"Without any intervention from CCCS, [Grab] could continue to hamper the ability of potential competitors to access drivers and vehicles," the commission said, adding that lack of competition would have enabled Grab to increase fares and commission rates for