SINGAPORE — Grab will be issued a warning letter from the authorities for opening its flat-fare JustGrab service to ComfortDelGro cabbies, a move that has been seen as an attempt to undercut a tie-up between the dominant taxi operator and rival ride-hailing company Uber.

Responding to queries from TODAY, which first reported on Grab’s move last week, the Land Transport Authority (LTA) said it was “concerned” about these practices.

“LTA has met with representatives from Grab to remind them that they should ensure that taxi drivers offer only metered fares, if the drivers’ taxi companies have not endorsed Grab to offer flat fares on their behalf,” the authority said in a statement on Monday (March 19). “LTA will also issue Grab a warning letter on this incident.”

LTA did not say when the warning letter would be issued to Grab, or if there would be penalties involved.

In response, Grab, which does not have a partnership with ComfortDelGro, said it would continue its discussions on the matter with LTA, but did not say whether or when it would stop the offending service.

“We hope that all taxi driver-partners in Singapore, including ComfortDelGro drivers, can be given the flexibility and choice of accepting JustGrab bookings, while not running foul of regulations,” a spokesperson for Grab told TODAY.

Grab’s move came on the heels of January’s launch of UberFlash, Uber and ComfortDelGro’s answer to the popular JustGrab service. Uber and ComfortDelGro announced a S$642 million tie-up in December last year that is currently under review.

Under current regulations, taxi drivers can only accept flat fares set by the third-party taxi booking services — like Grab or Uber — if these are endorsed by their taxi companies.

Up until Grab’s decision last month to open up its flat-fare feature to ComfortDelGro cabbies, they could accept only bookings via the ride-hailing firm’s GrabTaxi service, which uses a metered-fare system.

By default, the JustGrab feature is turned off for ComfortDelGro drivers, who have to switch it on if they wish to receive JustGrab bookings.

Grab told TODAY previously that it had extended the JustGrab feature to ComfortDelGro cabbies as part of efforts to serve its drivers better through “improved earnings, support and tools”. The firm added that it had also been reminding ComfortDelGro drivers of the existing regulations through calls to drivers, and a blog post.

But several ComfortDelGro taxi drivers interviewed by TODAY earlier this month admitted that they had accepted bookings via JustGrab above the metered fares.

The LTA said on Monday that it would work with the Public Transport Council to investigate any complaints or cases of overcharging reported to them, adding that they would “take firm action against errant taxi drivers involved”.

In the past year, the private-hire car and taxi industries have consolidated: Grab partnered five taxi operators — Trans-Cab, SMRT Taxis, Prime Taxi, Premier Taxis and HDT Singapore Taxi — to roll out JustGrab last March, while ComfortDelGro and Uber joined forces to launch UberFlash in January.

Meanwhile, competition among the rivals has heated up, with Grab dangling carrots to entice thousands of ComfortDelGro drivers to jump ship.

TODAY has reached out to ComfortDelGro for its response.