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Grab-Uber Merger Sees Consequences: Both Fined Total Of $13M By S'pore Competition Watchdog

[Update: 24 Sep 2018, 5:50pm]

Head of Grab Singapore, Lim Kell Jay added:

“Grab believes it should not be the only transport player subjected to non-exclusivity conditions. This is inconsistent with taxi industry practices and does not create a level playing field.”

[Update: 24 Sep 2018, 12:12pm]

Grab has reached out with a statement from Head of Grab Singapore, Lim Kell Jay:

In March, the ride-hailing landscape in Southeast Asia changed drastically after Grab announced its merger with Uber.

With the merger, Grab took over Uber’s operations and assets in Cambodia, Indonesia, Malaysia, Myanmar, the Philippines, Singapore, Thailand and Vietnam.

As part of the deal, Uber also took a 27.5% stake in Grab.

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.

A few days later, CCCS added that it had “reasonable grounds to suspect that the merger of Grab and Uber has infringed the Competition Act”, as the deal may lead to “substantial lessening of competition for the private-hire car industry in Singapore”.

Later in July, CCCS announced that its investigations on the deal “suggest the merger has infringed the Competition Act”, and also recommended imposing financial penalties on the parties (Grab and Uber).

In response, Grab said that it will be appealing against the provisional decision made by CCCS, and added that the watchdog appears to have taken a “very narrow approach in defining competition”.

It also stated that the provisional decision and proposed fines were “over-reaching” and “go against Singapore’s pro-innovation and pro-business regulations in a free market economy”.

Grab And Uber Fined $13 Million

Today, The Straits Times reported that CCCS has fined both Grab and Uber a combined $13 million for the merger.

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

CCCS also “directed both parties to lessen the impact of the transaction on drivers and riders, and to open up the market and level the playing field for new players”.

What this entails is that Grab drivers are now free to use any platform they desire, effectively removing Grab’s exclusivity arrangements with taxi fleets in Singapore.

Grab’s pre-merger pricing algorithm and driver commission rate will also be maintained, and Uber will need to sell the vehicles from Lion City Rentals to “any potential competitor who makes a reasonable offer based on fair market value”.

Featured Image Credit: Kentaro Iwamoto

Also ReadThis Is What Happened To Employees When Uber Sold Its Southeast Asian Unit To Grab

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