Singapore’s competition regulators ruled on Thursday that the merger of ride-hailing services Uber and Grab infringed the Competition Act and “substantially” lessened competition.
The Competition and Consumer Commission of Singapore said it proposed imposing financial penalties on both Uber and Grab and said it might require the two to unwind the deal if public consultation finds that the remedies proposed to recreate competition aren’t sufficient.
“CCCS has provisionally found that the transaction has removed competition between Grab and Uber, which were each other’s closest competitor,” it said. “The merged entity is likely to be able to increase prices and has in fact done so since the completion of the transaction.”
The investigation found evidence Uber wouldn’t have left the Singapore market in the near- to medium-term if the merger hadn’t taken place, the statement said, noting that it had already entered a deal to collaborate with ComfortDelGro by introducing UberFlash to compete with Grab — a collaboration that was withdrawn after the merger, it said.
The barriers to entry for new competitors in the ride-hailing space would be high, due to strong network effects, especially as Grab had imposed exclusivity obligations on taxi companies, car rental partners and some drivers, it said.
CCCS proposed a series of remedies to address the “substantial lessening of competition concerns,” including:
- Removing exclusivity obligations, lock-in periods and/or termination fees on all drivers on Grab’s ride-hailing platform and/or who rent from Grab Rentals, Lion City Rentals or rental partners of Grab
- Removing Grab’s exclusivity deals with any taxi or chauffeured private hire cars (CPHC) flet in singapore
- Maintaining Grab’s pre-merger pricing algorithm and driver commission rates until competition is revived in the market
- Requiring Uber to sell all or part of Lion City Rentals to any potential competitor with a reasonable offer and preventing Uber from selling it to Grab without regulators’ prior approbal
Uber and Grab now have 15 working days to petition CCCS before it makes its final ruling.