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.
(Photo : 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.

Sectors