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BFF-19
SINGAPORE-INTERNET-TRANSPORT-GRAB-UBER
Singapore watchdog fines Grab, Uber $9.5 mn over merger
SINGAPORE, Sept 24, 2018 (BSS/AFP) – Singapore on Monday fined ride-hailing
firms Grab and Uber $9.5 million for breaking competition rules when they
merged, saying the deal had increased fares and thrown up roadblocks for
competitors.
Singapore-headquartered Grab agreed to buy US firm Uber’s ride-hailing and
food business in Southeast Asia in March, ending a bruising battle between
the companies.
In return, Uber received a 27.5 percent stake in Grab.
However the deal came under scrutiny across the region, and the
Competition and Consumer Commission of Singapore was among watchdogs in
several countries that launched probes.
In the conclusion to its investigation, the commission said it had found
the merger had substantially reduced “competition in the ride-hailing
platform market in Singapore”.
Grab fares rose between 10 and 15 percent after the deal as the company
reduced the number of points earned by riders and made it harder for them to
redeem them, it said.
Potential competitors were hampered by exclusivity agreements Grab forged
with taxi companies, car rental partners and some of its drivers, the
commission said. The deals meant drivers could not work for other companies.
The commission fined both firms a total Sg$13 million ($9.5 million) —
Sg$6.42 million for Grab and Sg$6.58 million for Uber — “to deter completed,
irreversible mergers that harm competition”.
The body also criticised Grab and Uber for not getting the commission’s
clearance before completing the deal.
In addition to the fines, the commission ordered several measures be
implemented to ease fares and allow new players to compete with Grab,
including reverting to pre-merger pricing and allowing Grab drivers to use
other ride-hailing platforms.
Lim Kell Jay, head of Grab Singapore, said the firm completed the deal
“within its legal rights, and still maintains we did not intentionally or
negligently breach competition laws”.
In the Philippines, the competition watchdog last month approved the
merger but imposed conditions related to areas including pricing and
exclusivity arrangements to prevent Grab acting like a monopoly. Malaysian
authorities are also examining the deal.
BSS/AFP/MR/ 1120 hrs