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Grab-Uber deal on hold as watchdog orders immediate measures to keep market 'open and contestable'

SINGAPORE — The merger between Grab and Uber has stalled again, as the Competition and Consumer Commission of Singapore (CCCS), which is still investigating the deal, ordered a set of enhanced interim measures to take immediate effect on Friday (April 13).

A ComfortDelgro taxi passes Uber and Grab offices in Singapore.

A ComfortDelgro taxi passes Uber and Grab offices in Singapore.

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SINGAPORE — The merger between Grab and Uber has stalled again, as the Competition and Consumer Commission of Singapore (CCCS), which is still investigating the deal, ordered a set of enhanced interim measures to take immediate effect on Friday (April 13).

These measures, which are meant to keep the ride-hailing market “open and contestable”, also include those to further protect drivers.

For instance, apart from making sure that Uber or new drivers who are joining Grab’s platform of their own accord are not subject to any exclusivity obligations, lock-in periods and/or termination fees, Grab also has to ensure that these drivers are not penalised, directly or indirectly, as a result.

A new directive was also placed addressing drivers who rent vehicles from Uber’s vehicle rental subsidiary Lion City Rentals.

Grab and Uber must ensure that these drivers will be free to drive for any ride-hailing platform and shall not be subject to any hindrance such as higher rental rates and the lack of insurance coverage that will limit the drivers’ ability to drive for any platform. Both firms are expected to inform drivers of this through an email.

They also have to 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.

This expanded set of measures come on the back of an earlier one proposed on March 30, which stipulated that to “preserve and/or restore competition and market conditions”, both ride-hailing firms would have to maintain their pre-transaction pricing, pricing policies and product options for their services in Singapore. They were also told not to obtain any confidential information from each other, including information related to pricing, formulas, customers and drivers.

In its statement on Friday, the CCCS also said that the Uber mobile application in Singapore should continue to run until May 7, “with necessary customer support to handle contractual and payment issues”.

This is the second time the shutdown of the app has been put off, the first being on April 6. The app was due to stop running on April 8, after Grab announced its takeover of Uber’s South-east Asian operations on March 26.

News of the deal prompted the CCCS to launch an investigation on March 27, into what it described as an “unnotified transaction” between the two companies.

The competition watchdog said on Friday that the latest interim measures will stay in effect until its investigation into the merger is completed, and/or until any competition concerns that may arise from the deal are resolved, or until it revokes them due to “material changes in market conditions”. It did not give a date for when its investigations will be done.

During this time, as part of the added measures, Grab and Uber have to maintain their pricing and product options for riders and drivers, including the levels of base fares, surge factor and driver commission rates — as they were before the sale.

Grab will also not be able to take over operational data such as trip history data from Uber to enhance its market position, though the CCCS noted that Grab will be able to receive personal data of drivers, riders and merchants who have opted to move from Uber to the Grab platform.

Introduced on Friday is also an order for Grab to stop its exclusivity arrangements with all taxi fleets in Singapore. This is provided that there are no exclusivity arrangements between any taxi fleet and any third-party ride-hailing platform in Singapore other than Grab, and that all taxi operators permit their respective taxi drivers to drive for any third-party ride-hailing platform for metered and fixed fare jobs.

To see that all parties comply with the latest interim measures, the CCCS said that an independent monitoring trustee shall be appointed for this.

‘WORK WITHIN SET CONSTRAINTS’

In response to the announcement, Grab said that it will “work within the set constraints”, but pointed out that the review by the commission will hopefully take into account “a dynamic industry that is constantly evolving, highly competitive, and being disrupted by technology and new services”.

Mr Lim Kell Jay, head of Grab Singapore, also voiced concern over the possible “unintended effects of the interim measures”, that they should not be “hampering competition and restricting businesses that have already been investing in the country over the years”.

While the company recognised CCCS’ commitment to preserving competition, Mr Lim said that “all companies — no matter big or small, digital or traditional — are capable of innovation in a free market”.

“Grab entered Singapore five years ago with minimal resources and the goal of enabling all taxi drivers to earn a better living using our platform,” he said.

“We’re proud to be headquartered in Singapore, where the country’s free market economy and policies enable businesses to compete and innovate vigorously to solve customer needs. We trust the Government will continue to be pro-business in providing a path for start-ups to flourish and become sustainable businesses.”

Mr Lim also said that the company will continue to focus on building better products to compete, ensuring fairness for passengers and drivers, and to cultivate the tech talent pool here through its regional research and development centre in Singapore.

As for its alliance with taxi operators, Grab is “fully supportive” of extending its platform to all taxi drivers, including ComfortDelGro drivers who are still constrained from picking up JustGrab jobs.

TODAY understands that that Grab has no plans to stop its partnership with taxi operators such as Trans-cab, HDT Taxi, Premier Taxi, Prime Taxi, and SMRT Taxi.

Separately on Friday, the Land Transport Authority expressed its support for the interim measures issued by the CCCS. “In particular, we note that the measures pertaining to the removal of exclusivity obligations and impediments to market contestability will further promote market competition in the point-to-point (P2P) transport sector.”

The authority is reviewing the broader regulatory framework for this sector, including studying how to structure the sector and license private-hire car booking service operators.

“This is to ensure the sector remains open and contestable and no single operator dominates the market to the detriment of commuters and drivers. Where necessary, we will work with CCCS, taxi companies, and private-hire car booking service operators to operationalise CCCS’s interim measures directions requirements,” it added.

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