ComfortDelGro and Uber call off ‘short-lived’ partnership

SINGAPORE — Less than six months after the tie-up was first announced, taxi operator ComfortDelGro and American-ride hailing firm Uber have parted ways, it was announced on Friday (May 25).

“The operating environment has changed and the basis on which we were supposed to form the partnership is no longer relevant given that Uber has exited the region,” said ComfortDelGro managing director and group chief executive officer Yang Ban Seng in a press statement.

The writing was on the wall after rival company Grab acquired Uber’s South-east Asia operations in March, placing the partnership — which was under review by the competition watchdog — in limbo. 

However, just last month, ComfortDelGro and Uber sought an extension to the Competition and Consumer Commission of Singapore’s (CCCS) deadline to submit outstanding information for the review of the deal, which will see ComfortDelGro buying a 51 per cent stake in Uber’s rental subsidiary, Lion City Holdings.

The companies kept mum about the reasons for the extension, with some experts believing at the time that the tie-up could be kept alive by the firms to facilitate the entry of Indonesia’s Go-Jek into the market — through a possible partnership with ComfortDelGro.

On Friday, taxi operator said: “Consequently, the application to the CCCS will be withdrawn.”

Responding to media queries, the competition watchdog confirmed that the companies have requested to withdraw their applications. Nevertheless, it said the latest development will have no bearing on the separate review of the Grab-Uber deal.

“The Grab-Uber investigation is a separate matter and CCCS will take into account all relevant facts and circumstances, including new market developments in our consideration of the matter,” CCCS reiterated.

Such developments include Go-Jek’s confirmation — which came just a day before ComfortDelGro’s announcement — that it will enter regional markets including Singapore in the next few months. On Thursday, Go-Jek CEO Nadiem Makarim said the firm wants to seek out local partners with interests and expertise in each of the new markets.

Go-Jek and ComfortDelGro are reportedly exploring a partnership, although both had declined to comment on the matter. In a Bloomberg interview on Friday, Go-Jek president Andre Soelistyo said it has begun talks with several taxi operators in Singapore, but declined to identify them.

Mr Yang said in the press statement that ComfortDelGro “still has every intention to go into the private hire vehicle space”.

“We see the increasing convergence of private hire vehicles and taxis in the personalised mobility market,” he added.

Experts believe that ComfortDelGro will continue to eye partnerships with new players going forward. However, they questioned the merits of such a strategy.

“ComfortDelGro’s strategy has always been to tie up with the weaker player so as to control the terms of engagement,” said Singapore University of Social Sciences (SUSS) transport economist Walter Theseira. “The problem however, is that the weaker players haven’t been able to stay the course.”

Grab’s acquisition of Uber’s regional business was announced less than four months after ComfortDelGro sealed the tie-up with Uber.

SUSS urban transport expert Park Byung Joon noted that about a year ago, ComfortDelGro had to enter the private-hire scene to stay in the point-to-point transportation business.

“But the landscape has changed now. Grab has become the dominant player and is rolling back on its incentives and discounts. Fares are higher so it might be levelling the playing field between private-hire and taxi services... I am not sure ComfortDelGro would still benefit from joining the scene,” said Dr Park.

Should a new partnership between Go-Jek and ComfortDelGro materialise, the Indonesian company “would obviously stand to benefit, because they will have a ready fleet of taxis to tap on”, Dr Park noted. “But I don’t see what Go-Jek can offer to ComfortDelGro,” he said.

In a separate statement, Uber thanked ComfortDelGro for the brief collaboration.

“While short-lived, this innovative partnership has already resulted in key insights that are informing exciting new strategies for both parties — with ComfortDelGro continuing to explore private hire vehicles, and Uber firmly committed to increasing taxi partnerships as one solution in our vision for a multi-modal mobility platform,” said Uber chief business officer, Brooks Entwistle.