SINGAPORE — A potential partnership between taxi operator ComfortDelGro and ride-hailing app Uber would have limited impact on the competition, namely rival app Grab and its five taxi company partners, said transport analysts yesterday.

And as the battle for market dominance heats up, most of the analysts felt that commuters would stand to benefit ultimately — although fees might not necessarily come down in the long run.

Uber has continuously been trailing Grab in the region, losing out in terms of product offerings, said National University of Singapore transport researcher Lee Der-Horng.

“It is understandable that Uber pursues this alliance simply because it has been falling behind Grab in the South-east Asia market,” he said.

On Tuesday, ComfortDelGro, whose nearly 16,000 Comfort and CityCab taxis account for 60 per cent of the country’s fleet, announced that it was in discussions with Uber on making its taxis available on the latter’s application. However, the taxi operator said there was no certainty the discussions would yield an agreement or alliance.

The announcement on the Singapore Exchange came five months after Grab rolled out an exclusive partnership with SMRT Taxis, Prime Taxi, Premier Taxis, Trans-Cab and HDT Singapore Taxi. The five taxi operators would offer JustGrab, a fixed-fare service dependent on dynamic pricing, on the Grab app.

ComfortDelGro chose to go its own way, and unveiled a flat-fare booking system on its own app weeks later. It subsequently teamed up with homegrown ride-hailing app Ryde to allow bookings through the app.

Singapore University of Social Sciences (SUSS) urban transport planner Park Byung Joon felt a partnership between Uber and ComfortDelGro could see the two companies rolling out incentives to try to win over commuters, or they could bank on their combined fleet to raise fares.

However, SUSS economist Walter Theseira believed that commuters would benefit from the alliance, as it could result in shorter waiting times, for example, amid more intense competition.

He warned that such incentives for commuters would be short-lived. In the longer term, a dominant player would emerge between Grab and Uber, and the winner of the bruising competition would raise profit margins through higher fees.

“While matching should still be more efficient, I would not expect any more passenger subsidies and incentives once a dominant player emerges,” said Dr Theseira.

To date, he noted that there has been no anti-competitive behaviour in any market with private-hire apps.

“Until a dominant player emerges, I would expect conduct to be extremely competitive with frequent price wars and incentives targeted at both drivers and passengers,” he said.

In April, Uber disclosed that the company had more than a million active riders here, or one in five of Singapore’s population.

Asked about its market share earlier this month, Grab’s Singapore country head Lim Kell Jay told TODAY that it has “easily more than two times” Uber’s user base.

If talks between ComfortDelGro and Uber were to go smoothly, new services could be rolled out in three to four months, said Dr Lee.

Grab declined comment, but its partners said they were unfazed by the potential tie-up between ComfortDelgro and Uber.

Premier Taxis managing director Lim Chong Boo said: “ComfortDelGro has always been a dominant player in the taxi industry ... It’s nothing new to me that I’m the smaller boy.”

HDT Singapore Taxi managing director James Ng said the move was rational, given that commuters are increasingly turning to apps to hail rides. Should a tie-up be sealed, fares must be attractive enough to retain drivers, he added.

This was a similar concern raised by Mr Lim. Noting that some taxi drivers have been suspended by Grab for their low acceptance rates, he said: “The fares, when they come down (during low-peak periods), are unrealistic for taxi drivers ... we try to mitigate, but Grab has control of the app. I appeal to Grab to see if they can look after the taxi drivers as well.”

Since partnering Grab, Prime Taxi chairman Neo Nam Heng noted that taxi drivers have been able to make more trips around midnight, and that additional income has helped with the retaining of drivers.

He said: “Today, everybody has to face this reality. You join your arch-rival to fight the competitor. If you cannot beat them, you join them.”