Singapore – Singapore’s competition watchdog on Friday outlined a set of interim measures for ride-hailing firms Grab and Uber Technologies to ensure an open market as it continued its investigation into their merger in the city-state.
The Competition and Consumer Commission of Singapore (CCCS) said the measures include preventing Grab from taking over operational data from Uber to enhance its market position, adding that Uber would continue to operate in Singapore until May 7 to smoothen the transition.
Uber sold its Southeast Asian business to bigger local rival Grab, marking the US company’s second retreat from an Asian market. Uber gets a 27.5 percent stake in Grab, which was last valued at $6 billion after a financing round in July.
“We trust that the CCCS’ review takes into account a dynamic industry that is constantly evolving, highly competitive, and being disrupted by technology and new services,” said Lim Kell Jay, head of Grab Singapore.
Other measures include ensuring that drivers are not subjected to exclusivity obligations and making sure both the ride-hailing companies maintain their pre-merger pricing and commission levels.
The watchdog also requires Grab to cease its exclusivity arrangements with all taxi fleets in Singapore, subject to provisions.
The Singapore-based company may, however, receive personal data of drivers, riders and merchants who choose to shift to the Grab platform, the CCCS said in a statement.
The interim measures are necessary because the two firms are each other’s closest competitors and have a significant combined market share, the competition watchdog said, adding that barriers to entry were likely to be high.
“In particular, many drivers are constrained by exclusivity arrangements such that they can only drive for one ride-hailing platform. This makes it difficult for a new ride-hailing platform to attract drivers,” it said.
Any new entrant in the ride-hailing business would likely have to make significant investments to attract passengers and drivers, and to compete with the existing player, added the agency, which began its probe last month.
Both companies should also ensure that drivers who rent a vehicle from Uber’s car leasing company are free to drive for any ride-hailing platform.
Unless revoked by the agency, the order will be in place until the investigation is completed or concerns over the deal are resolved. Singapore’s Land Transport Authority (LTA) said on Friday that CCCS’ measures on the removal of exclusivity obligations and impediments to market contestability will further promote market competition in the point-to-point transport sector.
The LTA was in the process of reviewing the broader regulatory framework for the industry, including studying how to structure the sector and license private hire car booking service operators, it added.
The Philippines’ anti-trust agency had also ordered Uber to delay its shutdown.
Lawyers and analysts had previously told Reuters that regulatory scrutiny could complicate Grab’s takeover of Uber’s business, but there is little the authorities can do to stop US firm from simply exiting the region.