Grab-Uber deal sparks fears of price hike

Consumers and industry watchers are raising concerns that Grab's acquisition of Uber's South-east Asian business will lead to higher fares.
Consumers and industry watchers are raising concerns that Grab's acquisition of Uber's South-east Asian business will lead to higher fares.PHOTO: ST FILE

SINGAPORE - Consumers and industry watchers are raising concerns that ride-hailing firm Grab's acquisition of rival Uber's South-east Asian business will reduce competition and lead to higher fares.

Ms Zhang Bin Bin, who takes both Grab and Uber rides, is unsure how fares will change now that "competition is minimised".

"If prices increase or if they match regular taxi prices, I will probably go back to public transport," said the film-maker, 23.

Freelance photographer Robin Choo, 27, had the same concerns.

"If prices for rides booked through Grab were to rise, I think I will have reconsider my travel options," he said.

Drivers interviewed raised concerns about their incentives and commission rates.

Private-hire drivers pay about 20 per cent of each fare to their operators.

Mr Ken Tan, 45, is concerned about how the move might affect his earnings. While he has driven for both Uber and Grab, he said he was able to earn more driving for Uber due to the better driver incentives.

Drivers now no longer have the option of choosing another operator if they are dissatisfied with their current firm, he said.

Mr Thanaraj Suppiah, 36, who has been driving full-time for Uber since last June, said: "I will have to see how well Grab takes care of drivers."

Mr Ang Hin Kee, executive adviser to the National Taxi Association as well as the National Private Hire Vehicles Association, said consumers and drivers need more choices, not fewer.

Nonetheless, if the merger is approved here, he hopes that end users will be better off.

"With potentially lower cost of operations via lower staff overheads and less spending on advertisement, the new entity can focus on delivering better terms for drivers and commuters," he said.

"But if it infringes on commuter and driver interests, I hope the regulators can steer it back on track."

Singapore University of Social Sciences senior lecturer and transport economist Walter Theseira said regulators can do one of two things to ensure that the market remains equitable for all parties.

One is to have a dominant player which is well regulated. The other is to have multiple players and let natural competition keep them in check.

"My personal view is that there has to be first of all, evidence that market size leads to efficiency," he said. "Secondly, there must be an appropriate lever to ensure that an enlarged player does not abuse its power."

Meanwhile, consumers do not seem too worried that Grab - with its ambitions of becoming a major player in the food, payment and loan sectors - would have access to information on how they travel, eat and spend.

"With the Government's cashless drive, consumers like myself will have to face the fact that my data is being collected," Mr Choo said. "My concern lies with how secure my data is."

Said Ms Zhang: "I am quite indifferent to that... since many apps or even devices are already collecting such data."

Grab Singapore head Lim Kell Jay said: "We have always cared about our customers' well-being and as a start, we will immediately extend our free personal accident insurance policy to all new interested Uber drivers and riders who choose to be part of our platform.

"We expect our combined operations to create a better experience for our community of drivers and passengers... we expect to see shorter wait times and faster pick-ups. This would mean better productivity for our drivers, and better reliability for our passengers."