ComfortDelGro shares jump after news of possible alliance with Uber

As of June 2017, ComfortDelGro has a fleet of 15,556 taxis, out of a total taxi population of 25,699.
As of June 2017, ComfortDelGro has a fleet of 15,556 taxis, out of a total taxi population of 25,699.PHOTO: ST FILE

SINGAPORE - Shares of taxi giant ComfortDelGro jumped in morning trading on Wednesday (Aug 23), a day after it said that it is discussing a possible "strategic alliance" with  Uber Technologies.

The shares were trading 6 per cent higher at $2.30 as of 10.25am.

ComfortDelGro said on Tuesday after Singapore markets closed that the alliance may include "collaboration in relation to management of fleet vehicles and booking software solutions in Singapore". It may also include making its taxis available on Uber's ride-sharing app.

All other local taxi companies have similar tie-ups with Grab, Uber's main rival here.

ComfortDelGro has 15,556 taxis as of June 2017, out of a total taxi population of 25,699. Uber is estimated to have more than 15,000 cars held under fully owned Lion City Rentals.

DBS Vickers Securities, in a research note on Wednesday, said its initial take on a Comfort/Uber alliance was positive, though details were sketchy.

 

It said that based on total private-hire chauffeur-driven cars of more than 42,000 in Singapore, a Comfort+Uber fleet would have around 45 per cent of the total combined taxi and private-hire car fleet. The figure excludes private-hire car drivers who may be driving under the Uber platform but using vehicles from other sources, such as other rental cars or their own vehicles.

"Although the potential alliance has positive benefits, we are also cognisant that competition may not cede completely as Singapore is still likely to be a key market for Grab as well," said DBS Vickers. "In our view, Grab has also been very progressive in its offering with the combination of all services under JustGrab, and was recently said to have raised an additional US$2.5 billion in funding."