SG's competition watchdog is looking into Grab's acquisition of Trans-Cab

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Singapore's competition watchdog, the Competition and Consumer Commission of Singapore (CCCS), is looking into ride-hailing company Grab's proposed acquisition of Trans-Cab, according to minister of state for trade and industry Alvin Tan.

Responding to a question from Non-Constituency MP Leong Mun Wai, Tan said in Parliament that CCCS received Grab’s notification of its proposed acquisition of Singapore’s largest taxi operators, Trans-Cab. He explained that it will assess the impact of the proposed acquisition on competition and consult relevant stakeholders before reaching a decision on the matter.

Don't miss: Grab to buy one of Singapore's largest taxi companies Trans-Cab

“CCCS will assess the impact of the proposed acquisition on competition and consult relevant stakeholders before reaching a decision on the matter,” he said, adding that a public consultation will be done and that members of the public will be able to provide feedback.

Tan was responding to Leong who asked if CCCS would be looking at the proposed acquisition for anti-competitive practices. He also asked if safeguards would be put in place to ensure that after the acquisition, taxi drivers would not be disadvantaged by Grab as well as if the watchdog would look at the impact of the recent consolidation of the taxi companies on consumers.

He further asked if CCCS would study the impact of Grab's previous acquisition of Uber's regional business in terms of waiting times, incomes of drivers and fares for consumers, noting that Grab already has 75 per cent of the ride hailing market here.

These questions come weeks after Grab stated that it will be acquiring Trans-Cab. It will acquire 100% of the shares in Trans-Cab in this deal, it said in a statement at the time.

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.

In response, Tan said that CCCS uses a two-stage evaluation approach when it comes to looking at mergers. The first phase will see them doing a quick assessment done over approximately 30 working days. If the results from this assessment is inconclusive, the watchdog will conduct a more detailed review in a second phases. This review is expected to take 120 working days.

Dr Tan Wu Meng then asked what some of the effects of the proposed takeover might be and if the takeover's effects will be studied on a single combined market, or at the individual level of the taxi, private-hire car or point-to-point transport sectors.

Tan responded saying that not all merges will give rise to competition issues and that many are actually pro-competitive or competitively neutral. As a result, CCCS will look at if the merger leads to a substantial reduction in competition instead.

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.

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