The Competition and Consumer Commission of Singapore (CCCS) has raised competition concerns about Grab's proposed acquisition of Trans-cab, based on information it received from both entities, members of the public and third-party feedback from industry players.

In particular, the feedback from industry players said this may raise barriers to expansion and entry for Grab’s rival ride-hailing platforms, given the importance of scale in the ride-hailing platform industry, according to a press release by CCCS.

Such feedback is notwithstanding the fact that licensed ride-hailing operators are prohibited from imposing exclusive arrangements which prevent their driver-partners from driving for rival platforms under the Land Transport Authority's (LTA) Point-to-Point (P2P) Transport regulatory framework.

CCCS added that both Grab and Trans-cab may offer "commitments" at this stage to address the potential competition concerns, otherwise it will proceed with a more in-depth review of the proposed acquisition.

Grab: Trans-cab drivers can continue earning through multiple ride-hailing platforms

In response to Mothership's queries, Grab said its priority is to work closely with CCCS to address areas that require further review.

Together with Trans-cab, Grab is also committed to ensuring that the acquisition benefits commuters and helps raise the overall standards of the point-to-point (P2P) transportation industry.

The platform added, "Digitalising Trans-cab’s fleet will improve driver productivity and taxi availability so that consumers can get a ride more easily. This will also improve driver earnings."

In addition, Grab will abide by the P2P Regulatory Framework which promotes open competition and prohibits any form of anti-competitive behaviors such as offering exclusive arrangements to drivers.

This means that Trans-cab drivers will continue to have the flexibility to earn through multiple ride-hailing platforms and pick up rides through street hailing.

Both Grab and Trans-cab said the acquisition will not result in a "substantial lessening" of competition

Grab first made the announcement that it was buying Trans-cab on Jul. 20, 2023.

Trans-cab has a combined taxi and private-hire-vehicle (PHV) fleet of some 2,200 taxis and more than 300 private-hire vehicles.

The acquisition includes Trans-cab’s taxi and car rental business, maintenance workshop, and fuel pump operations.

The purchase is for an undisclosed amount.

On Aug. 7, 2023, CCCS embarked on its initial review of the acquisition.

It called for public feedback a week later on Aug. 14.

According to CCCS, both Grab and Trans-cab said that the proposed acquisition will not result in a "substantial lessening" of competition in the relevant markets.

The reasons given were that there is minimal overlap between the two entities, a lack of prohibitive barriers to entry and the fact that both drivers and riders can easily switch to other ride-hailing platforms.

A "significant increase" in the number of drivers for Grab is also not expected once the acquisition is complete.

Left photo courtesy of Grab Singapore, right photo by Jiachen Lin via Unsplash