Grab to buy one of Singapore's largest taxi companies Trans-Cab

Ride-hailing company Grab will be acquiring Trans-Cab, one of Singapore’s largest taxi operators, according to a statement by the companies. It will acquire 100% of the shares in Trans-Cab in this deal.

The acquisition includes Trans-Cab’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.

“Consumer behaviours have shifted and we’ve recognized 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. “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."

“We see this as a strategic match with win-win-win outcomes for all. By boosting the number of drivers on our platform and helping them to operate more efficiently, we improve how quickly and reliably we find a ride for our passengers, whenever they need one,” added Yee Wee Tang, the Managing director of Grab Singapore.

Grab plans 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. With Grab’s allocation technology, Trans-cab drivers will be assigned bookings in a highly efficient and intelligent way, maximising their productivity so they can earn more.

Don't miss: Grab cuts 11% of workforce as it 'adapts to the environment' in which it operates

Grab also plans to explore combining software with vehicle hardware to further enhance the driving experience. For example, Grab is exploring a pilot to place large displays in-vehicle where drivers can manage all jobs including street hail through one interface, with additional features like navigation that drivers can choose to use. Additionally, Grab plans to use tech to improve the taxi-sharing experience, which is currently done manually between taxi drivers on an ad-hoc basis.

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.

GrabRentals, the private-hire car rental arm of Grab, is also expected to benefit from greater operational efficiency and reduced costs by tapping into Trans-Cab’s experience and expertise in fleet support through its maintenance workshop. A larger fleet size will also allow GrabRentals to derive savings from scale in areas like auto insurance premiums and procurement of parts.

If the deal is approved in the fourth quarter of 2023, Trans-Cab will be the first Singapore taxi company acquired by Grab. Grab has reportedly been trying to buy a local cab operator for a few years now. 

It attempted to buy SMRT's fleet in 2017 but unfortunately, the deal fell through. It again tried to start talks with Prime Taxi last year but the deal has yet to make headway. 

Trans-Cab has been operating in Singapore for about 20 years and has seen steady growth resulting in it being the second biggest taxi firm locally.  Earlier this year though, SMRT Corporation merged its taxi businesses, Strides Taxi and Strides Automotive, with Premier Taxis and Premier Automotive Services to create Singapore’s second largest taxi operator.

As part of the merger, a new joint venture company, Strides Premier, was formed to hold the merged businesses. Strides Holdings will hold a majority stake in Strides Premier and Premier Corporation while BS Investors will jointly hold the remaining stake. Strides Holdings is a wholly owned subsidiary of SMRT and the parent company of Strides Taxi and Strides Automotive.

Saying that, ComfortDelGro continues to remain Singapore’s largest taxi operator, reportedly holding just over 60% of the market. 

Earlier this year, Grab underwent a round of layoffs, cutting 11% of its workforce or about 1,000 jobs in order to manage costs and ensure more affordable services long-term, according to a letter that was sent to employees late on Tuesday night and that was posted publicly on the company's website.

"I have difficult news to share today. We are letting over 1,000 Grabbers go," said Grab's group CEO, Anthony Tan. "We are informing you after office hours for as many of our locations as possible, so you have the space and time to process the news privately."

Related articles:
RM86.77 million fine against Grab by MyCC quashed by High Court
Grab reportedly planning biggest round of layoffs since the pandemic
Grab cuts 11% of workforce as it 'adapts to the environment' in which it operates