SG competition watchdog raises concerns over Grab, Trans-cab deal

Grab is among the most commonly used e-wallets in Malaysia / Photo credit: Grab

The Competition and Consumer Commission of Singapore (CCCS) has raised concerns over Grab‘s planned Trans-cab acquisition following its initial review of the deal.

In a statement, the CCCS noted that licensed ride-hailing operators in Singapore are “prohibited from imposing exclusive arrangements.” Based on third-party feedback it received during its initial review, it found that the deal may discourage Trans-cab drivers from using rival ride-hailing platforms.

If so, Grab’s competitors may find it harder to enter the space and grow “given the importance of scale” in the industry, the CCCS added. It said it needs to examine the plan’s effects on competition more closely and that it will continue with a more detailed review after getting the relevant documents from Grab and Trans-cab.

At any time during the review, the two companies may also offer to change or cancel the plan, or they could also fix, reduce, or prevent any of its negative effects.

The CCCS started its initial review in August. The two companies had applied for a decision on whether the deal would break a section of the 2004 Competition Act, which bans mergers that have caused, or may cause, a significant reduction of competition in any market in Singapore.

The acquisition news was announced in July. The deal, in which Grab will acquire 100% of Trans-cab shares, would give the ride-hailer access to over 2,200 taxis and more than 300 private-hire vehicles. It will also allow Grab to use Trans-cab’s maintenance workshop and fuel pump operations.

See also: Does combining Grab with asset-heavy Trans-cab make sense?