SINGAPORE: The merger between ride-hailing firms Grab and Uber will not be unwound but they were fined a combined $13 million yesterday by Singapore’s competition watchdog, which said their union earlier this year had violated competition laws.
Grab was fined about $6.4 million while Uber was fined about $6.58 million by the Competition and Consumer Commission of Singapore (CCCS), which also spelt out a series of measures to cushion the impact of the merger on commuters, drivers and potential competitors.
The CCCS ruled that the Grab-Uber deal had reduced market competition and resulted in Grab getting an 80 per cent share of the Republic’s ride-hailing market, up from 50 per cent previously.
“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,” said CCCS chief executive Toh Han Li.
Uber announced in March that it was exiting South-east Asia – including Singapore – and that its business in the region would be acquired by its rival Grab. This was in exchange for the American firm getting a 27.5 per cent stake in Grab, as well as a seat on the Singapore-based firm’s board.
The CCCS noted that since the merger, effective fares had risen by about 10 to 15 per cent while drivers’ commissions had shrunk.