By Himanshi Akhand and Yantoultra Ngui
(Reuters) -The Competition and Consumer Commission of Singapore (CCCS) on Monday raised competition concerns about a plan by Southeast Asian ride-hailing company Grab to acquire Singapore’s third-largest taxi operator, Trans-cab.
The commission said in a statement that it was unable to conclude at the end of its first phase of review of the proposed acquisition that the deal did not give rise to any competition concerns.
“Third-party feedback received by CCCS suggests concerns on the effect of Grab’s ownership of the Trans-cab fleet on Trans-cab drivers’ usage of rival ride-hail platforms, which may raise barriers to expansion and entry for Grab’s rival ride-hail platforms,” the commission said.
The commission said it needed to review the impact on competition of the proposed acquisition in greater detail.
Grab and Trans-cab may offer commitments to address any competition concerns raised, it said, adding that otherwise it would proceed to a more in-depth, second phase of review after receiving relevant documents from the companies.
A Grab spokesperson said both companies intended to abide by the point-to-point regulatory framework of Singapore’s Land Transport Authority, which promotes open competition and prohibits any form of anti-competitive behaviour, such as offering exclusive arrangements to drivers.
“This means that Trans-cab drivers will continue to have the flexibility to earn through multiple ride-hailing platforms and pick up streethail rides,” the Grab spokesperson added.
The Grab spokesperson said both Grab and Trans-cab were committed to ensuring the benefits of an acquisition to commuters and they would help raise the overall standards of the industry.
“Digitalising Trans-cab’s fleet will improve driver productivity and taxi availability so that consumers can get a ride more easily,” the Grab spokesperson said. “This will also improve driver earnings.”
Nasdaq-listed Grab announced in July that it aimed to acquire Trans-cab in a deal that would include a combined taxi and private-hire-vehicle fleet of more than 2,500 vehicles owned by Trans-Cab.
The proposed acquisition comes as Singapore saw M&A activity fall 69% year-on-year in the first nine months of this year, according to LSEG data.
That compares with a 28% fall in global M&A activity in the same period from a year ago, LSEG data shows.
(Reporting by Himanshi Akhand in Bengaluru and Yantoultra Ngui in Singapore; Editing by Varun H K and Robert Birsel)
