One of the biggest shift that happened within the local and regional tech industry this year happened back in March when Uber sold its Southeast Asian business to rival Grab. Within days of the merger, the Competition and Consumer Commission of Singapore (CCCS) launched an investigation regarding it and now, we’ve finally known the verdict.
According to a Reuters report, the apparent conclusion is that the deal substantially reduced competition in the market. For this, CCCS is fining both companies a total of S$ 13 million (~US$ 9.5 million or ~RM39.32 million) with the hope that this will prevent future mergers that will harm competition.
Toh Han Li, Chief Executive of the CCCS, said, “Mergers that substantially lessen competition are prohibited and CCCS has taken action against the Grab-Uber merger because it removed Grab’s closest rival, to the detriment of Singapore drivers and riders.” The commission also added that since the merger took place, fares on Grab rose 10% to 15%.
While we have no solid numbers the way the CCCS has, there’s plenty of rider anecdotes reflecting this. Not only do the anecdotes point to an increase in price, but it’s also to the extent that they are becoming more expensive than conventional taxis. Grab’s response to this is that the increase in fares are due to the implementation of dynamic pricing, with prices going up or down depending on the demand and supply of the service.
To be fair, while Singapore is ahead on the verdict, Malaysia also has Grab under the microscope since the announcement. Maybe we’ll hear something from the Malaysian Competition Commission (MyCC) in the months to come.