SINGAPORE — Disagreeing with ride-hailing firm Grab’s position that the competition watchdog’s adverse ruling on Grab-Uber deal was “overreaching and goes against Singapore’s pro-innovation and pro-business regulations”, fellow homegrown player Ryde said that the merger is “detrimental to innovation” for the industry.

Remedies proposed by the Competition and Consumer Commission of Singapore (CCCS) “do not go far enough but is a step in the right direction” in mitigating the negative effects of the merger and ensuring that the market remains contestable, Ryde said on Friday (July 6) in an open letter — issued a day after the commission released its findings on the deal.

The CCCS ruled that the sale of Uber’s South-east Asia ride-hailing business to Grab had led to a “substantial lessening of competition” and price hikes in Grab rides.

It proposed several remedies to restore competition in the market. They include removing exclusivity obligations and lock-in periods for drivers, and maintaining Grab’s pricing algorithm and commission rates prior to the merger.

The commission also proposed that Grab and Uber be fined for entering into the deal “despite having anticipated potential competition concerns”.

In response, Grab criticised the commission for taking a “very narrow approach in defining competition”.

On Friday, Ryde stated that monopolies “harm free enterprise and stifle innovation”. The firm, which started out as a carpooling service in 2015, rolled out its fixed-fare private-hire car service in May.

“The raison d'etre of antitrust and competition laws are to promote competition and prohibit business practices that deprive consumers of the resultant benefits of competition. Their proper administration should not be construed as unfairly punishing companies on account of their size or of their commercial success,” it wrote in the letter, which addressed each of the remedies proposed by the commission.

It added that if the other proposals by the commission are insufficient in reviving competition in the market and the merger cannot be unwound, the commission should impose a “meaningful and substantial financial penalty” on the relevant parties.

“(This) would signal CCCS’s resolve in stamping out anti-competitive practices in Singapore.”

This penalty should “annul the ‘supposed’ financial gain” resulting from the deal, Ryde suggested, in order to deter other “errant” firms with similar intentions, across all industries.

The commission’s suggestion to remove exclusive obligations, such as those tying down drivers to the Grab platform and specific car rental firms, is “imperative”, it stressed.

The presence of exclusive obligations puts new entrants on a “major disadvantage” and makes it tough for them to “reach a sufficient scale” to challenge the incumbent.

Ryde added: “(Drivers) ought to be given a choice of ride-hailing platforms so that their incomes would not be jeopardised by any platform in the case of technical breakdowns or suspensions of accounts.”

Ryde also agreed with the commission’s proposals to remove Grab’s exclusive arrangements with any taxi or private-hire car fleet in Singapore, and requiring Uber to sell its car rental arm Lion City Rentals to “any potential competitor who makes a reasonable offer”.

“Lion City Rentals should be able to work openly and immediately with Ryde to (take on) drivers and also with any future entrant, post-acquisition,” Ryde said.