LTA to ‘reach out’ to Go-Jek, Jugnoo as ride-hailing industry heats up

SINGAPORE — With two new entrants, India’s Jugnoo and Go-Jek from Indonesia, set to spice up the ride-hailing market here, the Land Transport Authority (LTA) said on Monday (April 30) it will reach out to the two firms to “understand their operations better”.

This was after news emerged that Jugnoo plans to launch here in May, while Go-Jek is said to be planning to expand its services to Singapore, the Philippines, Thailand and Vietnam.

Go-Jek is also rumoured to be eyeing a partnership with Singapore’s largest taxi company ComfortDelGro, though both firms have remained tight-lipped.

ComfortDelGro’s tie-up with Uber remains in limbo after the two companies sought an extension to the Competition and Consumer Commission of Singapore’s (CCCS) Monday deadline to submit outstanding information for the review of the deal.

The taxi operator, which has about 13,000 cabs on its books, currently has a tie-up with homegrown app Ryde which allows users to book its cabs.

Jugnoo, which uses auto rickshaws in India, is set to roll out its private-hire car service here on Tuesday. Using a “reverse-bidding” pricing system, it will see drivers placing bids for rides, and riders will select a bid based on a driver’s rating, bid price and waiting time. Jugnoo did not respond to TODAY’s queries. 

An LTA spokesperson reiterated on Monday that all prospective private-hire car booking-service operators have to comply with its regulatory requirements before they are allowed to operate in Singapore.

“We are also reviewing the regulatory structure of the point-to-point industry, to ensure that the industry remains open and contestable in the long term and no single operator dominates the market, to the detriment of commuters and drivers,” said the spokesperson.

ComfortDelGro’s proposed acquisition of a 51 per cent stake in Lion City Rentals — Uber’s vehicle-rental subsidiary in Singapore — appears to have stalled.

The CCCS, which is reviewing the S$642 million deal, told TODAY on Monday that the parties have requested “a further time extension to submit the necessary information”.

The competition watchdog had previously given the parties until March 5 to submit further information, and then extended the deadline to the end of April.

This time, the request came after the two firms failed to supply “complete information” to allow the CCCS to move on to the second stage of its review, after the initial phase could not “conclusively determine” competition issues would not arise from the agreement.

Lion City Rentals was not part of the deal announced by Grab last month, when the ride-hailing firm said it was buying out Uber’s operations in South-east Asia.

When queried on the reason for the extension, ComfortDelGro spokesperson Tammy Tan said the company was unable to comment on the agreement owing to “confidentiality clauses”.

But the ComfortDelGro-Uber deal is not dead in the water, as transport analysts told TODAY that it could be kept alive by the firms to facilitate Go-Jek’s entry into the market.

Transport economist Walter Theseira said the only way the deal could proceed is “if there is another well-capitalised entrant (such as Go-Jek) that wants an existing fleet of vehicles”.

However, he questioned why Uber would go ahead with the deal, which was announced last December, more than three months before its retreat from the region.

He added that this would equate to giving Grab’s competitors, ComfortDelGro and Go-Jek, “ammunition”, especially as Uber now has a stake in Grab.

Urban transport expert Park Byung Joon believed that ComfortDelGro was still mulling the deal with Uber, given that the American firm’s retreat was not on the radar when it was mooted.

As part of the deal, ComfortDelGro drivers could take on bookings via Uber’s app, said Dr Park.

He added: “Now that Uber is out, it means they’re just (left with) rental services for private-hire drivers.”

ComfortDelGro should stick with the deal if it still sees potential in renting cars to private-hire car drivers. Ultimately, though, Dr Park said it boils down to whether the business can be profitable.

“If the answer is no, then they shouldn’t continue,” he added.