Guard against monopoly risk from Uber-Grab deal

PHOTO: ST FILE

In the Internet world, big is generally better because of the digital business model.

By being able to scale up with only marginal increments in costs, profits are ultimately driven by volume as a result of the company's dominance in the industry. In fact, the digital economy is all about the "winner-takes-all" approach to market share.

While consumers may benefit because of the technological efficiency, we have to guard against the risk of one or two companies monopolising the market.

In the event of a merger between Uber and Grab (Reports of Uber-Grab regional deal 'speculation'; Feb 18), the new entity would certainly have near monopoly pricing power in Singapore.

When you take into account the alliances between taxi companies and Uber or Grab, the competitive dynamic is even bleaker - it virtually disappears.

I would urge the Government to review all aspects of any such deal with an anti-trust approach and consider how it could adversely impact the industry's competitiveness.

The consumer will certainly become the loser in such unchecked consolidation.

Lester Lee Keng Kok