Grab and Uber slapped with fines by Singapore regulator over merger
Grab and Uber, the two biggest Singapore ride-hailing companies, have recently been fined S$13 million ($9.5 million) for antitrust violations after the Asian ride-hailing giant acquired its U.S. rival’s regional operations. This immediately sparked a debate on whether it set a fair condition for lifting all curbs on Grab. The review by the Competition and Consumer Commission of Singapore (CCCS) took such factors into account such as the turnover of both parties, the seriousness, nature, and duration of the infringement, and other factors including determining whether both parties were cooperative.
Uber announced in March that it was exiting South-east Asia and that its business would be acquired by Grab, with the US firm getting a 27.5 per cent stake in Grab and a seat on the Singapore-based firm’s board. Since the merger, as witnessed by CCCS, effective fares had risen 10 per cent to 15 per cent while driver commissions had extremely shrunk.
Grab and Uber have been opponents for years. The two are the most renowned app-based ride-hailing service in South East Asia whose apps are used at a huge number. Throughout the final decision by CCCS, Grab has been meted a $6.58m fine, while Uber faces a fine of $6.42m.
It also ordered Uber to sell vehicles of its Singapore-based Lion City Rentals to any potential competitor who makes a reasonable offer based on fair-market value, and prohibited Uber from selling those vehicles to Grab without regulatory approval. Lion City’s fleet totalled 14,000 vehicles as of December.
Uber said it believed the CCCS’s decision was based on an “inappropriately narrow definition of the market, and that it incorrectly describes the dynamic nature of the industry, among other concerns.” It said it would consider appealing. Grab said it completed the transaction within its legal rights, and maintained it did not intentionally or negligently breach competition laws.
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