Tuesday , December 18 2018

S’pore watchdog fines Uber, Grab $9.5mn over merger

Bloomberg

Singapore regulators fined Uber Technologies Inc. and Grab S$13 million ($9.5 million) for antitrust violations after the Asian ride-hailing giant acquired its US rival’s regional
operations.
Effective fares in the city-state rose between 10 percent and 15 percent after the “anti-competitive merger,” the Competition and Consumer Commission of Singapore said in a statement. While the watchdog didn’t nullify the deal, it ordered Grab to unwind exclusive arrangements with taxi operators, car rental partners and drivers because they prevented the expansion of potential rivals. The decision comes six months after the regulator embarked on an investigation into the landmark deal in March, when Uber agreed to sell its Southeast Asian operations to Grab in return for a 27.5 percent stake and board seat.
The Singaporean company now holds about an 80 percent share despite the entry of several smaller players into the ride-hailing market, according to the commission.
“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,” CCCS Chief Executive Toh Han Li said in the statement.
The regulator also ordered Uber to sell vehicles operated by its Singapore-based Lion City Rentals to any potential competitor who makes a reasonable offer. It barred the San Francisco-based company from offloading them to Grab without regulatory approval, potentially crimping a source of vehicles for its growing cohort of drivers.
“This prevents Grab and Uber from absorbing or hoarding Lion City Rentals vehicles to inhibit the access to a vehicle fleet by a new competitor,” the commission said in its statement. Lion City had a fleet of about 14,000 vehicles as of last year.
Uber said it was disappointed with the ruling and was considering an appeal. Grab welcomed the regulator’s decision to allow the merger and said it will abide by its proposed remedies. But it added that all drivers, including taxi operators, should be subject to non-exclusive conditions.
“Grab should not be the only transport player subjected to non-exclusivity conditions,” said its Singapore head, Lim Kell Jay. “This is inconsistent with taxi industry practices and we will continue our dialogue to create a level playing field for all.”

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