Use regulations to encourage competition

Many people are advocating new regulations in the light of the Grab-Uber merger (Watchdog probes effects of Grab-Uber merger; March 30).

However, no one benefits from over-regulation, even in the face of competition.

The reason that Uber and Grab took off in the first place was their ability to disrupt a taxi industry that was overly regulated to the point that it was both non-competitive and inefficient.

The best way forward is to use regulatory powers to foster a level playing field that will continue to encourage innovation and competition.

First, any exclusive anti-competition contracts should be banned. For example, the Land Transport Authority (LTA) should come up with regulations that prevent any ride-sharing company from enforcing contracts that prohibit their drivers from working with another ride-sharing company.

Second, car rental, insurance, repairs and maintenance contracts should likewise be competitive, and any attempt to restrict them to one exclusive ride-sharing company should be made illegal.

Third, ride-hailing and taxi companies should be made to publish relevant data, such as the average price per kilometre, average lengths of trips, number of trips and surge-pricing, to the LTA.

This data should be made public, as it plays an important part in ensuring that there is adequate competition in the industry.

Lester Lee Keng Kok

A version of this article appeared in the print edition of The Straits Times on April 02, 2018, with the headline 'Use regulations to encourage competition'. Print Edition | Subscribe