The Competition and Consumer Commission of Singapore (CCCS), Singapore’s official competition authority, is examining the prospective acquisition of Trans-Cab by Grab, a renowned ride-hailing company. Minister of State for Trade and Industry, Alvin Tan, communicated this information while responding to questions in Parliament.
Non-Constituency MP, Leong Mun Wai, had queried about CCCS’s stance on the proposed merger, highlighting concerns about potential anti-competitive practices. He raised questions on whether CCCS would impose safeguards to protect taxi drivers from being disadvantaged post-acquisition and whether the watchdog would evaluate the recent taxi companies’ consolidation’s impact on consumers.
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Leong also urged the CCCS to investigate the effects of Grab’s previous acquisition of Uber’s regional business, considering Grab currently dominates 75% of the ride-hailing market in Singapore. This issue surfaced a few weeks following Grab’s announcement to acquire 100% of Trans-Cab’s shares.
The planned acquisition encompasses Trans-Cab’s taxi and car rental services, maintenance workshop, and fuel pump operations, including a combined taxi and private-hire-vehicle (PHV) fleet of over 2,500 vehicles.
In response to Leong’s queries, Tan delineated CCCS’s two-stage evaluation approach for scrutinizing mergers. Initially, a quick assessment, spanning around 30 working days, is conducted. If the findings are ambiguous, a comprehensive review in a second phase is undertaken, expected to last 120 working days.
Dr Tan Wu Meng further inquired about the potential effects of the proposed takeover, questioning whether these effects would be analyzed for a single combined market or individually for the taxi, private-hire car, or point-to-point transport sectors.
Tan assured that not all mergers raise competition issues, with many being pro-competitive or competitively neutral. CCCS’s primary focus is to identify if a merger results in a substantial reduction in competition.
Should the deal receive approval in Q4 2023, Trans-Cab will be the first local taxi company acquired by Grab. Despite unsuccessful attempts to acquire a local cab operator in the past, Grab remains persistent.
With 20 years of steady growth, Trans-Cab stands as the second-largest taxi firm in Singapore. Earlier this year, SMRT Corporation consolidated its taxi businesses, Strides Taxi and Strides Automotive, with Premier Taxis and Premier Automotive Services, forming Singapore’s second-largest taxi operator, Strides Premier.
This news is based on Marketing Interactive.
