Singapore's competition watchdog Competition and Consumer Commission Singapore (CCCS) says the merger between Grab and Uber, which were each other's closest competitor, has reduced competition in the market and increased fares for riders.

It added that the merged entity has in fact increased prices since Uber sold its Southeast Asian business to Grab for a 27.5% stake in Grab.

This is what CCCS's investigation has found about the merger and its impact on the market and users:

The Grab-Uber merger has infringed the Competition Act

The merger has stifled competition as any new entrant would likely have to incur a significant amount of upfront capital to attract drivers and riders.

Grab-Uber merger lowers quality of its services

Without sufficient competition after the merger, Grab would be able to raise fares for riders and commission rates for drivers, lower the quality of its services and reduce innovating its product offerings.

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What CCCS proposes 

CCCS called for steps to be taken to restore market contestability. They are:

Reducing fares to pre-transaction prices & increasing competition 

• Maintaining Grab's pre-transaction pricing algorithm and driver commission rates until competition is revived in the market.
• Facilitating a new entrant's access to a vehicle fleet by requiring Uber to sell Lion City Rentals (or any part of its assets) to any potential competitor who makes a reasonable offer, and prevent Uber from selling Lion City Rentals (or any part of its assets) to Grab without CCCS' approval.

Financial penalties 

• Grab and Uber have carried out the merger despite having anticipated potential competition concerns.
• Even after CCCS has notified both Grab and Uber on the ramifications of the merger on the market, both entities have "proceeded to complete the Transaction", despite thinking that the outcome would be "irreversible".

What you can do

You can submit your feedback on proposed remedies to the competition concerns.

Information on the public consultation can be accessed and downloaded from the CCCS website under the "Active Public Consultation" page of the "Public Register and Consultation" section.

The deadline for submissions is July 19.

You can read the full statement here.

Top image via Grab & Uber