Taking aim at Grab, new ComfortDelGro-Uber service offers up to 10% cheaper fares

SINGAPORE — Firing a fresh salvo at their chief rival Grab, Uber and ComfortDelGro on Thursday (Jan 18) announced that their new UberFlash option would offer fares up to 10 per cent cheaper than the regular price on the US ride-hailing company's low-cost private-hire service.

The new service, which combines cars from the low-cost UberX service with ComfortDelGro taxis on Uber's app, also promises to cut wait time and get riders to their destinations more quickly. It starts at 6am on Friday.

The launch of UberFlash comes more than a month after Uber and ComfortDelGro announced a S$642 million tie-up, which is being reviewed by the Competition Commission of Singapore (see side-bar below).

A screenshot of the new “uberFLASH” service Photo: Uber

The service is subject to dynamic pricing, meaning commuters will see higher fares when demand rises. But they will be shown the fares upfront before they book a ride.

"Fares will be, on average, 5 to 10 per cent lower than UberX," the two companies said at a press briefing on Thursday.

In comparison, fares on rival Grab's fixed-fare service JustGrab, which is also subject to dynamic pricing, range between S$4 and S$100, depending on factors such as travel time, distance, and real-time demand and supply.

Grab launched the JustGrab service in March last year with five taxi operators: Trans-Cab, SMRT Taxis, Prime Taxi, Premier Taxis and HDT Singapore Taxi. Asked to comment on the UberFlash service, a Grab spokesperson said the company welcomed others to "join us to outserve our customers".

Under the terms of their partnership, Uber will take a 10 per cent cut on bookings taken up by ComfortDelGro cabbies, less than the 20 per cent commission it levies on Uber drivers, said Uber Singapore general manager Warren Tseng.

Mr Brooks Entwistle, Uber's chief business officer in the Asia-Pacific, said more product tie-ups could be in the works with ComfortDelGro, Singapore's largest taxi operator. But he declined to give details.

ComfortDelGro's fleet has shrunk dramatically in the past year amid bruising competition from private-hire car operators. It had 13,695 Comfort and CityCab taxis on its books in November last year, 2,800 fewer than in January that year.

ComfortDelGro taxi driver Stannley Chiok, 43, was upbeat about trying the UberFlash service because it would give him more choices and bookings. "When you've more jobs coming in, you've better income. It's better than driving on the road empty, waiting for passengers," he said.

Another cabbie with the firm, however, does not intend to use the service for the time being, noting that ComfortDelGro's own booking app already keeps him busy. The driver, who wanted to be known only as Mr Yeo, 50, said: "Maybe I'll use it later if a lot of people say it's good. We adopt a wait-and-see attitude first."

Review of Uber-ComfortDelGro tie-up still underway

Thursday's launch of the new UberFlash service comes more than a month after Uber and ComfortDelGro announced a S$642 million tie-up that will see the Singapore transport operator acquire a 51 per cent stake in Uber's car-rental arm here.

Though the deal is still subject to regulatory approval, Uber spokesperson Leigh Wong said the authorities granted the firms "special permission" to go ahead with the launch of UberFlash while a review of the tie-up was underway.

A spokesperson for the Competition Commission of Singapore (CCS), which is assessing the proposed partnership, told TODAY that the first phase of its review will wrap up on Feb 19. If the commission is satisfied that the tie-up does not raise competition concerns, Uber and ComfortDelGro will be allowed to proceed without undue delay.

"However, if the CCS is unable to conclude that a proposed acquisition does not raise competition concerns, it will proceed to carry out a more detailed assessment ... which the CCS will endeavour to complete within 120 working days," the commission's spokesperson added.

Under the Competition Act, firms are given immunity from financial penalty in cases where agreements are eventually found to prevent, distort or restrict competition, from the time they notify the CCS of a proposed partnership until the commission reaches a decision.

Such immunity, however, does not apply to agreements that abuse a dominant position or mergers that result in or may cause a substantial reduction in competition.

"Therefore, if (UberFlash) is subsequently found to infringe (these), the parties must terminate the service or they may be liable to financial penalties imposed by the CCS," the spokesperson added.