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In full: Interim measures issued by competition watchdog on Grab-Uber deal to take immediate effect

Issuing a third statement on the Grab-Uber merger on Friday (April 13), the Competition and Consumer Commission of Singapore said a series of interim measures to keep the ride-hailing market "open and contestable" will come into immediate effect until it completes its investigation into the deal. It also ordered the Uber app to be made available until May 7, "with necessary customer support to handle contractual and payment issues".

In full: Interim measures issued by competition watchdog on Grab-Uber deal to take immediate effect

Issuing a third statement on the Grab-Uber merger on Friday (April 13), the Competition and Consumer Commission of Singapore said a series of interim measures to keep the ride-hailing market "open and contestable" will come into immediate effect until it completes its investigation into the deal. It also ordered the Uber app to be made available until May 7, "with necessary customer support to handle contractual and payment issues".

Uber/Grab merger: CCCS Issues Interim Measures Directions

The Competition and Consumer Commission of Singapore ("CCCS") has today issued Interim Measures Directions ("IMD") to Grab and Uber (collectively, the "Parties") which will help ensure that the market remains open and contestable. This follows from CCCS's concerns arising from Grab's announcement on 26 March 2018 that it has acquired Uber's Southeast Asian business, with Uber acquiring a 27.5 per cent stake in Grab (the "Transaction"), feedback from third-parties and the review of the Parties' written representations in response to CCCS's proposed IMD issued on 30 March 2018.

The IMD takes effect immediately from today and shall have effect until the completion of CCCS's investigation and/or resolution of any competition concerns that may arise from the Transaction or unless otherwise varied or revoked by CCCS due to material changes in market conditions. Measures to keep the market open and contestable

The key measures in the IMD require the following: removal of exclusivity obligations on drivers, prevention of Uber's operational data from being used by Grab to enhance its market position, preserving pre-Transaction pricing and commission levels, and ensuring drivers and riders are free to choose their preferred platform. The IMD prevents action by the Parties that may prejudice the giving of any subsequent direction by CCCS in any manner after reviewing the merger.

The key measures are as follows:

(a) Grab shall ensure that new drivers entering into an agreement to drive on Grab's platform of their own accord are not subject to any exclusivity obligations, lock-in periods and/or termination fees. Grab shall ensure these drivers are not penalised, directly or indirectly, as a result.

(b) The Parties shall ensure that drivers who rent a vehicle from Lion City Rental ("LCR") are free to drive for any ride-hailing platform and shall not be subject to any impediments (e.g. higher rental rates and/or lack of insurance coverage) that limit their ability to drive for any ride-hailing platform. This shall be clearly communicated through an email to these drivers.

(c) Grab shall cease its exclusivity arrangements with all taxi fleets in Singapore, provided that (a) there are no exclusivity arrangements in Singapore between any taxi fleets and any third-party ride-hailing platform other than Grab, and (b) that all taxi operators permit their respective taxi drivers to drive for any third-party ride-hailing platform for metered and fixed fare jobs.

(d) Grab shall not take over operational data (e.g. historical trip data) from Uber to enhance its market position. Grab may however receive personal data of drivers, riders and merchants (e.g. names, contact details, and supporting documents for vocation licence applications) who have expressly opted in and moved to the Grab platform.

(e) Each Party shall maintain their pre-Transaction pricing and product options for riders and drivers, including the levels of base fares, surge factor and driver commission rates.

(f) The Parties shall clearly communicate through an email to drivers and riders in Singapore who were on the Uber platform that migration to the Grab platform is purely optional (i.e. drivers and riders have a choice whether to migrate to Grab and are not required to download or use Grab's ride-hailing platform).

(g) An independent monitoring trustee shall be appointed to monitor the compliance of the IMD.

5. To allow a smoother transition time for riders and drivers, the Uber ride-hailing platform will continue to be available in Singapore and terminate on 7 May 2018, with necessary customer support to handle contractual and payment issues.

Brief Grounds for IMD

6. CCCS is of the view that the IMD is necessary to address the following concerns:

(a) The Parties are each other's closest competitors and have a significant combined market share. Their close rivalry can be seen from the surge in Uber's fares following the recent outages of Grab's app.

(b) Barriers to entry are likely to be high due to strong network effects (i.e. the larger the number of drivers that are available on a ride-hailing platform, the larger the number of riders will be attracted to use that platform, and vice versa). In particular, many drivers are constrained by exclusivity arrangements such that they can only drive for one ride-hailing platform. This makes it difficult for a new ride-hailing platform to attract drivers. Further, a new entrant would likely have to invest a significant amount of upfront capital in order to attract drivers and riders to move over from the incumbent ride-hailing platform, so as to build up a critical mass of users. The new entrant would likely have to continue sustained investment in order to compete with the incumbent ride-hailing platform.

(c) After the Transaction was completed on 25 March 2018, Uber and Grab have begun transferring assets (e.g. historical trip data) immediately. Consequently, the IMD is necessary to prevent further transfers and preserve CCCS's ability to make appropriate directions if CCCS makes a finding of infringement at the end of CCCS's investigations to remedy, mitigate or eliminate any adverse effects of such infringement.

Next Steps

7. CCCS's investigation into the Transaction is on-going. CCCS will be contacting all relevant parties to obtain necessary information.

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