Previously, when Grab bought Uber’s assets in Singapore, they were monitored closely by Singapore’s competition watchdog, the Competition and Consumer Commission of Singapore (CCCS).
The end result? Grab was restricted from indiscriminately changing their prices until recently.
And it seems like, once again, Grab’s under the eye of CCCS again.
S’pore Competition Watchdog Looking into the Potential Merger Between Grab & Go-Jek
On 3 Dec 2020, CCCS commented that it is aware of two companies in Singapore making headway in hammering out a deal to merge.
Grab CEO Anthony Tan had reportedly sent an internal memo to employees, telling them that the company might be “making acquisitions” in the near future. Or more specifically, Gojek.
Here’s what he wrote on an internal employee platform:
“There is speculation again about a Gojek deal.
“Our business momentum is good, and as with any market consolidation rumours, we are the ones in a position to acquire.”
Public Listed Company
According to Bloomberg which reported on the possible merger, Grab’s Anthony Tan is expected to become the CEO of the combined Grab-Gojek company in Singapore while Gojek executives would run the entity in Indonesia under the Gojek brand.
Which makes sense considering that Grab is number one in Singapore while Gojek is number one in Indonesia.
The final goal of the merger, it reported, is to become a public listed company.
Meanwhile, both Grab and Gojek refused to comment on the matter, with Gojek saying they don’t comment on rumours or speculations.
Monopoly Not Allowed In S’pore
Now, if you’re wondering why Grab caught the attention of CCCS so many times, it’s pretty simple.
CCCS’s job is to make sure that there is no monopoly of any services in Singapore.
Think of it this way.
If there were two companies offering service A in Singapore, both have to keep their prices attractive or their market share will be makan-ed by their competitor.
However, if there’s only one company offering service A? That company can charge anyhowly and still be able to get business.
Of course, you’ll ask: But Grab and Gojek are not the only private-hire companies in Singapore, right?
True, but with Gojek gone, they’ll be the biggest and baddest and do have some leeway to anyhowly charge prices if they want to.
Under section 54 of the Competition Act (Cap 50B), any mergers that result, or is expected to result, in a substantial lessening of competition isn’t allowed.
CCCS says that they’re currently looking into the matter.
Image: TY Lim / Shutterstock.com & TY Lim / Shutterstock.com