The Grab-Uber merger might’ve been old news but yesterday, the entire issue came into the spotlight again.
All because of Singapore’s competition watchdog, the Competition and Consumer Commission of Singapore (CCCS).
Grab-Uber Merger Has Breached Competition Act in S’pore
According to the CCS, the merger caused a “substantial lessening of competition” within the ride-hailing industry and made it harder for new competitors to enter the market.
It also announced that Grab has increased prices since the merger.
Uber, they said, wouldn’t have left the market if not for the merger. It was still in the process of partnering up with ComfortDelgro for the UberFlash function on their app.
Plus, with Grab focusing on fostering exclusive partnerships with taxi companies, car rental companies and some of its drivers, it’s keeping new competition from entering Singapore.
Netizens Definitely Not Impressed
Let’s admit it. While essential, the fact that this came out only four months after the entire situation went to shit?
Netizens are definitely not impressed.
Like this guy, who definitely knew this was going to happen. #fortuneteller
Okay, so what?
But of course, not everybody is against Grab.
Just like any argument, there are always two sides to a story. Or in this case, two different sides to support.
Hello, drivers no need to eat ah?
But this guy says it the best.
Everything is a choice
At the end of the day, whether you get affected by Grab’s actions, is because you choose to do so. Wise words indeed.
So What Happens Now?
Of course, CCCS won’t just show hand without giving some solutions, right? So here are a couple of things they’ve suggested to deal with the situation:
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- Remove all exclusivity from partnerships with Grab, including taxi companies and car rental companies.
- Allow drivers who rent from Grab or Lion City to leave without consequences to work for another company by removing exclusivity obligations, lock-in periods and/or termination fees.
- Make Grab keep prices low until competition within Singapore’s ride-hailing industry is restored.
- Force Uber to sell Lion City Rental to one of Grab’s competitor who offers a reasonable deal.
And if everything fails? The two companies might be made to undo the merger. That’s practically nerfing the imba player.
And now, the punishment
Singapore is a fine city indeed. And true to form, CCCS is considering imposing a fine on both companies.
Yes, including Uber which is no longer operating in Singapore.
They said that both companies were served with two options: to either notify CCCS of the merger for clearance or to seek CCCS’s advice before proceeding with the merger.
Well, they went ahead and just did it.
Grab said that they will be appealing against the decision. They said that the watchdog took a very narrow view on competition in Singapore.
There are other transport operators in Singapore besides them.
This move, they said, will kill the ideal of pro-innovation and pro-business in a free market in Singapore.
Where does the money from financial penalties go to?
Singapore is a fine city. We all know that. But where does the money go to? Does it disappear into the government’s coffers, never to be seen again?
We tried to do a bit of digging and this is what we found. It’ll probably go into a fund which will be used to help pay for Government expenditure.
For example, back in 2015, SMRT was fined 5.4 million, which went into the Public Transport Fund. The fund was used to pay for transport vouchers for the needy.
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