Grab, Uber fined by Singapore watchdog over anti-competitive merger

Grab says the Uber app will continue to operate for two weeks, while Uber Eats will run until the end of May

The Competition and Consumer Commission of Singapore (CCCS) has issued fines and pro-competition directions to Grab and Uber, having found that their March merger has “led to a substantial lessening of competition in the provision of ride-hailing platform services in Singapore”.

After launching an investigation on March 30, and considering feedback from industry players, stakeholders and the public, CCCS found that the merger infringed section 54 of the Competition Act, and that “it will be difficult for potential new entrants to attain a sufficient network” and compete effectively against Grab without intervention.

Grab says the Uber app will continue to operate for two weeks, while Uber Eats will run until the end of May

In a statement, CCCS said it has received “numerous complaints” from riders and drivers on the increase in fares and commissions by Grab post-merger, such as via a decrease in amount and frequency of driver promotions and incentives. Grab also reduced the number of points earned by riders per dollar spent as part of its rewards scheme, and increase the points required for redemptions.

Overall, CCCS found that effective fares have increased between 10 and 15 per cent.

Moreover, Grab has imposed exclusivity obligations on taxi companies, car rental partners and some of its drivers, which have made it difficult for potential competitors to scale and expand in the market. According to CCCS, Grab now holds about 80 per cent market share.

To level the playing field for new players, CCCS has issued directions, including for Grab to remove exclusivity arrangements with drivers and taxi fleets, as well as to maintain its pre-merger pricing algorithm and driver commission.

The watchdog has also slapped financial penalties – around S$6.5 million (US$4.8 million) each on Grab and Uber – taking into account “the relevant turnovers of the parties, the nature, duration and seriousness of the infringement, aggravating and mitigating factors (such as whether the parties were cooperative)”.

CCCS said Grab and Uber were informed of potential penalties that come with anti-competitive mergers, and had the option to notify the transaction for clearance prior to completing the deal. The two however proceeded with the transaction and began the transfer of assets immediately, “thus rendering it practically impossible to restore the pre-transaction status quo”.

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