Grab defends Uber deal to competition watchdog, calls exclusivity requirements double standards

Earlier this year, Uber Technologies sold its South-east Asian business to bigger regional rival Grab in exchange for a stake in the Singapore-based firm.
Earlier this year, Uber Technologies sold its South-east Asian business to bigger regional rival Grab in exchange for a stake in the Singapore-based firm. ST PHOTO: LEE JIA WEN

SINGAPORE - Grab has laid out its arguments against the Competition and Consumer Commission of Singapore's (CCCS) decision on the ride-hailing firm's acquisition of Uber's business here.

Among the arguments made in Grab's appeal is that while the commission proposed that exclusivity arrangements between Grab and taxi operators, car rental fleets and drivers be removed, there is currently no such requirement for other firms to get rid of similar exclusivity deals.

Calling the CCCS requirements on exclusivity as "one-sided", a Grab spokesman said on Friday (July 27): "Grab believes that this double-standard goes against the spirit of increasing choices for drivers and riders."

Noting that it had volunteered to the CCCS to lift its exclusivity arrangements, provided other players in the industry did so,  the Grab spokesman added: "Current market realities unfortunately do not reflect this, for instance, taxi operators are still able to restrict their drivers' ability to receive fixed-fare jobs on other platforms."

Grab also said it believed the deal complied with all relevant antitrust regulations, and noted that businesses are not required to notify the commission of mergers and acquisitions.

The firm said it had willingly notified the commission of the deal with Uber, and offered the watchdog facts and analysis to show the arrangement did not reduce competition.

The firm also said recent developments since Uber's exit from the market - such as the emergence of new ride-hailing firms and the growth seen by some taxi operators - pointed to the "constantly evolving" and "fast-paced and dynamic nature" of Singapore's transport sector.

"Grab welcomes such competition, and trusts that the CCCS will take the appropriate measures to ensure a level playing field in the transportation services market without unduly favouring or disadvantaging any particular player," said Grab.

 
 

The company said it has retained its pre-acquisition pricing and driver commissions.

In March, Uber announced that it would be exiting the South-east Asian market and that its operations in the region would be acquired by its Singapore-based rival Grab. 

The deal saw Uber take a 27.5 per cent stake in Grab, with Uber’s chief executive Dara Khosrowshahi joining Grab’s board.

The competition watchdog had said earlier this month that the deal between the two ride-hailing giants was anti-competitive, and proposed measures to ensure competition, such as the imposition of financial penalties on both Grab and Uber, and removing exclusivity clauses between Grab and cab companies.

Grab Singapore head Lim Kell Jay said that while the firm did not agree with some of the measures proposed, it was committed to working with the CCCS to "improve upon its proposed remedies to ensure a vibrant and dynamic transport sector".

"Today's transport sector is fiercely competitive, with numerous public and private transportation choices for consumers," said Mr Lim.

He added that Grab believed a level playing field, where operators could compete fairly, would benefit both consumers and drivers in the long run.

A commission spokesman said: "CCCS will make its final decision after careful consideration of the involved parties' representations, feedback on the proposed remedies, as well as all available information and evidence."