CCCS’ proposed measures may be counter-productive

The Competition and Consumer Commission of Singapore (CCCS) recently released its provisional findings after investigating the Grab-Uber merger, and proposes ways to restore “market contestability” and to impose financial penalties on the parties (“Competition watchdog says Grab-Uber merger lessened competition, proposes penalties”; July 5).

While I appreciate the CCCS taking action in an attempt to protect consumers and drivers, the proposed measures simply won’t work and could even make everyone worse off.

For one, Uber has left the South-east Asian region and it is impossible to unwind the acquisition.

The CCCS also proposed to impose financial penalties on Grab and Uber, having found that they have carried out the deal despite anticipating potential competition concerns and then causing a substantial lessening of competition in the ride-hailing market here.

Such a measure will send a bad signal to other companies looking to invest in Singapore, and impede its drive to become a global tech hub. It might even be tougher to encourage new entrants to compete with Grab if the authorities are seen as penalising innovative companies that succeed.

Should Grab also pull out in the worst-case scenario, drivers will again be out of jobs, and for commuters, we will have to go back to having to deal with picky taxi drivers who refuse to take passengers, or having to wait hours for a ride in the Central Business District on a rainy day.

I hope the CCCS will reconsider its proposals and think about feasible measures that will truly benefit Singapore and its citizens in the long run.