Grab's Trans-Cab Takeover Could Stifle Competition, Competition Watchdog Warns

By Thea Felicity

Jul 11 2024, 12:41 PM EDT

Grab's Trans-Cab Takeover Could Stifle Competition, Competition Watchdog Warns — Taxis drive down a street in Singapore on December 4, 2015. US ridesharing service Lyft on December 3 announced an expansion of its alliances with Asian partners in a move that ramps its challenge to Uber. Lyft , which in September unveiled a partnership with Didi Kuaidi in China, has added Ola in India, and GrabTaxi in Southeast Asia to the alliance, which allows interoperability of the mobile applications in various countries. MOHD FYROL/AFP via Getty Images

Competition and Consumer Commission of Singapore (CCCS) warns that Grab's proposed acquisition of Trans-cab will result in potential market dominance and reduced competition within the ride-hailing sector, Business Times reported.

The CCCS issued a provisional decision asserting that if allowed to proceed, Grab's absorption of Trans-cab, one of Singapore's largest independent taxi fleets, would solidify Grab's position in the market.

The competition watchdog specifically emphasized that Grab is already dominant in the ride-hailing industry. Meanwhile, Trans-cab, which operates independently without exclusive ties to any ride-hailing platform, is a crucial competitor.

However, unlike taxi fleets affiliated with specific platforms, Trans-cab drivers can use platforms that cater to app-based bookings and traditional street-hailing passengers.

Why Grab's Trans-Cab Takeover is Concerning

Besides stifling competition, CCCS also reports that there is currently a shortage of drivers in Singapore. Data shows that drivers who lease vehicles from fleets associated with specific ride-hailing platforms tend to prefer using those platforms more frequently.

Grab's proposed acquisition of Trans-cab is still awaiting approval. If implemented, it could result in fewer drivers available to competitors. This would intensify the competition in Singapore's ride-hailing market, potentially leading to increased challenges for other platforms to maintain their service levels and meet customer demand.

The CCCS further pointed out that barriers to entering the ride-hailing industry and high operational costs present massive challenges for new companies.

Grab's Response to CCCS

Grab's management defended the acquisition as a strategic move to support Trans-cab's digital transformation and improve driver livelihoods through technology-driven earnings improvements. Grab also reaffirmed its commitment to innovation, which benefits both drivers and passengers.

With the provisional decision announced, Grab and Trans-cab now have a limited timeframe to address the CCCS' competition concerns. The commission will then make a final determination on whether to approve or block the acquisition.