Grab Singapore's Trans-cab acquisition may violate competition law, says CCCS

Ride-hailing company Grab's plans to buy Singapore's third-largest taxi operator, Trans-cab, will "significantly weaken" competition by depriving them of an important source of drivers, said the Competition and Consumer Commission Singapore (CCCS). 

The CCCS said the acquisition is likely to entrench and strengthen Grab's already dominant position in the ride-hail platform market and infringes the law that prohibits anti-competitive mergers. 

Data 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. 

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In addition, there are also various strategies which may be employed by Grab to induce Trans-cab drivers to increase their usage of Grab’s ride-hail platform.

The merger is thus expected to result in a greater degree of “stickiness” of Trans-cab drivers to Grab’s ride-hail platform and a potential reduction in usage of rival ride-hail platforms, said CCCS.

Consequently, rival ride-hail platforms’ access to Trans-cab driver's post-merger is likely to be significantly restricted. Rival ride-hail platforms may face difficulties in replacing any loss of Trans-cab drivers on their respective ride-hail platforms in a timely manner due to driver supply shortages, lack of major non-affiliated taxi or private-hire car fleets to partner with, high cost of fleet ownership and expansion and hire cost of driver incentives, it said. 

For consumers, this might mean higher prices and fewer choices for ride-hail platform services. 

As such, the CCCS has welcomed both Grab and Trans-cab to offer solutions to address the competition concerns raised in the next 10 working days. CCCS will then decide whether to issue a favourable or unfavourable decision after consideration. 

News of Grab's acquisition of Trans-cab was first announced on 20 July 2023. In a statement, Grab announced that it is to acquire 100% of the shares in Trans-cab. 

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

Following which, Grab planned to launch an enhanced Grab Driver application that will be integrated with the mobile display units in Trans-cab taxis. The app will enable Trans-cab taxi drivers to manage their earnings and receive bookings from the Grab platform as well as Trans-cab’s existing call centre, all through a single platform.

Trans-cab drivers that join the Grab platform will also receive benefits offered to all Grab driver-partners, including free coverage through Grab’s Personal Accident Insurance whenever they are online on the Grab platform, as well as access to GrabAcademy, where they can pick up skills from a wide range of free courses from data analytics to supply chain management and digital marketing.

Driver-partners can also participate in Grab’s loyalty programs for additional rewards.

“Consumer behaviours have shifted, and we’ve recognised for some time the need to digitise the business and ensure our taxi drivers can continue to be competitive. We are confident this deal protects their future,” said Jasmine Tan, general manager of Trans-cab back in 2023. 

“Grab’s industry-leading tech will help our taxi drivers drive more productively and safely while serving their passengers better. We know that Grab cares deeply about their driver-partners, just as we do. We are entering this deal with full assurance that Grab will do their best to safeguard the livelihoods of our taxi drivers," said Tan. 

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