Watchdog to study Comfort-Uber deal further

Uber's CEO pledged to continue investing aggressively in South-east Asia even though the US ride hailing firm expects to lose money in the fast-growing market.
A media briefing last month on the UberFlash ride-hailing service. Among the issues that the Competition Commission of Singapore is still concerned about is whether UberFlash involves any coordination of pricing between competitors.
A media briefing last month on the UberFlash ride-hailing service. Among the issues that the Competition Commission of Singapore is still concerned about is whether UberFlash involves any coordination of pricing between competitors.ST PHOTO: JONATHAN CHOO

Competition Commission lists several remaining concerns, yet to determine if tie-up is anti-competitive

The Competition Commission of Singapore will embark on the second phase of its study of a proposed alliance between ComfortDelGro and Uber's Lion City Rentals as it has not been able to decide conclusively whether the tie-up is anti-competitive.

In a statement yesterday, the commission listed several remaining concerns since it started scrutinising the tie-up between Singapore's largest taxi operator and the American ride-hailing start-up.

These include whether the UberFlash ride-hailing service, which is already in operation, involves any coordination of pricing between competitors; and whether ComfortDelGro will continue offering its flat-fare service with "no surge pricing".

It will also examine if taxi and chauffeured private-hire car drivers are able to take jobs from multiple ride-hailing platforms and whether the variety of payment options for commuters will be reduced.

In addition, it is unsure if the current availability of street-hail and phone booking services will be affected by the tie-up.

The commission is also concerned if there will be a substantial lessening of competition in the industry, "given the various contractual and shareholding relationships between players, as well as potential consolidation in the industry".

It will also look into whether the alliance would in fact bring about economic efficiencies such as shorter waiting times for commuters.

ComfortDelGro said that Phase 2 of the review can take up to 120 working days to complete, which means the tie-up may not be formalised until as late as July.

The watchdog started scrutinising the tie-up in December.

For the second phase of its study, the watchdog has asked the two parties to submit further information on their deal by March 5. Thereafter, the commission said it will deliberate once again.

In response, both ComfortDelGro and Uber said separately that they intend to file the relevant documents for Phase 2 of the commission's study, and address any additional questions raised. ComfortDelGro added that Phase 2 of the review can take up to 120 working days to complete, which means the tie-up may not be formalised until as late as July.

 
 
 

The taxi giant said on Dec 8 that it had entered into a deal with Uber to buy 51 per cent of Lion City Rentals, saying the deal was worth $642 million. Since then, Uber has reportedly been in talks to sell its South-east Asian businesses to archrival Grab.

Both parties had declined to comment on the news, which first appeared early last month.

"Uber is committed to South-east Asia, and is continuing to invest to better serve riders, drivers and cities in the region," an Uber spokesman said when approached about the news last month.

A version of this article appeared in the print edition of The Straits Times on February 20, 2018, with the headline 'Watchdog to study Comfort-Uber deal further'. Print Edition | Subscribe