Uber and Grab fined $9.5 million for 'mergers that harm competition'

Singapore's competition watchdog has come down hard on the ride-hailers for hurting competition.

Jennifer Bisset
Jennifer Bisset
Jennifer Bisset Former Senior Editor / Culture
Jennifer Bisset was a senior editor for CNET. She covered film and TV news and reviews. The movie that inspired her to want a career in film is Lost in Translation. She won Best New Journalist in 2019 at the Australian IT Journalism Awards.
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Jennifer Bisset
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The time has come for Uber and Grab to face the wrath of Singapore's competition regulator.

The Competition and Consumer Commission of Singapore (CCCS) has fined the ride-hailers a combined S$13 million ($9.5 million) over the Uber-Grab merger deemed to have hurt competition in the country's ride-hailing market, Channel NewsAsia reported Sunday.

Individually, Uber was fined S$6.58 million and Grab S$6.42 million, penalties the watchdog imposed in order to "deter completed, irreversible mergers that harm competition." Despite the fines, the Uber-Grab merger was not required to be unwound.

Uber agreed to sell its Southeast Asia operations to Singapore-based rival Grab in March, in exchange for a 27.5 percent stake. The deal included handing over ride-sharing, food delivery, and payments and financial services in Singapore, as well as in Cambodia, Indonesia, Malaysia, Myanmar, Philippines, Thailand and Vietnam.

Just days after Grab announced the merger, the CCCS launched an investigation, raising concerns it would hurt competition. Grab released a statement Sunday saying it had been compliant with the watchdog in the review.

"Today we are glad that the CCCS has completed its investigations on the Grab-Uber transaction and did not require the transaction to be unwound," it said.

"Grab completed the Transaction within its legal rights, and still maintains we did not intentionally or negligently breach competition laws."

But Grab echoed its earlier sentiment toward the CCCS' "narrow" approach to its definition of competition.

"However, it is unfortunate that the CCCS is taking a very narrow market definition in arriving at its conclusion that the Transaction has led to a substantial lessening of competition," its statement read. "Commuters are free to choose between street-hail taxis and private hire cars, and it is a fact that private-hire car drivers' incomes are directly impacted by intense competition with street-hail taxis."

"Grab believes it should not be the only transport player subjected to non-exclusivity conditions," Lim Kell Jay, head of Grab Singapore, said on top of the initial statement. "This is inconsistent with taxi industry practices and does not create a level playing field."

As for whether it will appeal the decision, Grab told CNET in an email, "We will review the CCCS' final decision in detail before making a decision."

Aside from Grab, Singaporeans can hitch a ride with Singapore-based hailers Ryde and TADA, the latter of which only joined the competition in July this year.

Also in its way is Go-Jek, a ride-hailer from Indonesia which said in May it would launch its services in Singapore and other Southeast Asian countries in the coming months. Despite not operating in the country yet, the company made a statement saying it welcomed the CCCS' decision and that it was "encouraged to see the measures being taken to level the playing field."

"We are now confident that Singapore will have a robust, efficient and competitive market, and that our arrival will have a significantly positive impact on the lives of people in Singapore," Go-Jek said.

Uber did not immediately respond to a request for comment.

First published Sept. 23, 11:02 p.m. PT.

Update, 11:49 p.m.: Adds Go-Jek statement.

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