Grab obtains street-hail service license in SG, enters taxi market

GrabCab, a subsidiary of Grab Rentals and sister company of GrabCar, has been awarded a street-hailing service operator license (RSOL). Valid for 10 years, the licence will commence from 9 April this year. 

In a statement on Wednesday (2 April), Singapore's Land Transport Authority (LTA) said GrabCab's entry into the street-hail sector brings the total number of taxi operators in the country to six, providing drivers and commuters with more choices and an expected boost to taxi supply.

LTA noted that GrabCab’s licence terms are consistent with that of other existing street-hail operators, as it must ensure that its taxis are easily identifiable by street-hail customers, including having a prominent roof-top sign and a distinctive livery scheme.

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Additionally, its vehicle models must be approved by LTA, and must meet requirements such as having sufficient boot space to carry a folded wheelchair or luggage. Its street-hail services must also follow the same taxi fare structure components as other street-hail operators, and its fare must be prominently displayed, so that passengers are informed on the applicable fare rates.

Under the license, GrabCab will be allowed a three-year grace period to progressively expand their fleet to meet the minimum fleet size requirement of 800 taxis. GrabCab will also need to comply with the conditions of its licence, including meeting LTA’s safety standards and ensuring that partnership arrangements with drivers are non-exclusive in nature.

In conversations with MARKETING-INTERACTIVE, a Grab spokesperson said the new license enables the company to address unmet consumer demand and improve ride availability, particularly during peak hours, late nights and in areas only accessible by taxis. It also positions Grab to better serve the anticipated growth in point-to-point rides in the coming years, while catering to consumers who prefer street-hailing.

In the coming months, Grab will launch its 100% green GrabCab fleet, featuring popular low- and zero-emission hybrid and electric vehicles from manufacturers, offering consumers a greener way to travel. The company will also work with GrabCab drivers to uphold service standards and leverage its technology to enhance safety and convenience for all.

"Grab remains committed to maintaining an open and fair platform for all PHV and taxi drivers. We will continue to treat all drivers fairly, match them with optimal bookings, and empower them to maximise their productivity on our platform. This approach also ensures our marketplace remains efficient, providing consumers with a better ride-hailing experience," the spokesperson added. 

In 2023, Grab sought to enter the taxi market with plans to buy Singapore's third-largest taxi operator at the time, Trans-cab. It was set to acquire 100% of the shares in Trans-Cab in the deal, including the company's taxi and car rental business, maintenance workshop, and fuel pump operations as well as its combined taxi and private-hire-vehicle (PHV) fleet of more than 2,500 vehicles.

However, the deal fell through in 2024 after the Competition and Consumer Commission Singapore (CCCS) stated that the acquisition would "significantly weaken" competition by depriving them of an important source of drivers. 

At the time, the CCCS said the acquisition was likely to entrench and strengthen Grab's already dominant position in the ride-hail platform market and infringed the law that prohibits anti-competitive mergers. Data then analysed by CCCS indicated that drivers who rent from ride-hail platform-owned fleets tend to use more of that ride-hail platform as compared to drivers who do not rent from such fleets. 

Grab has also attempted to make other big moves in recent times. In February this year, Grab was reportedly in advanced talks to merge with Indonesian competitor GoTo. The companies reportedly sought to curb years of losses in Southeast Asia's competitive market. Following the rumours, GoTo Group clarified that speculation about a potential merger with Grab was untrue.

Grab has also cooked up a string of acquisitions in the food industry, including restaurant reservation app Chope in 2024, and HungryGoWhere in 2021. 

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