Some hope at last in the saga of Grab’s grab of Uber

By March 31, 2018Current

TL;DR – We need proper competition.

Grab grabbed Uber’s business in Southeast Asia. Understandably, that has raised concerns that amongst Singaporean consumers and private hire drivers. Thankfully, it seems that there is some hope yet.

Interim Measures Direction

The Competition Commission of Singapore (CCS) announced that it has reasons to suspect that Uber’s sale to Grab will substantially reduce competition in relation to the chauffeured personal point-to-point transport passenger and booking services (“CPPT Services”) market in Singapore, thus infringing the Competition Act.

As such, CCS has issued proposed Interim Measures Directions (“IMD”) to Grab and Uber. These IMD aim to preserve and/or restore competition and market conditions in the CPPT Services market to before the sale.

Amongst other things, the IMD will require the following Grab and Uber to maintain their independent pricing, pricing policies and product options in relation to the CPPT Services. This means that, for now, for all intents and purposes, consumers will still have an option between two different service providers.

It also seems that the CCS has taken in concerns raised by the National Taxi Association (NTA) and the National Private Hire Vehicles Association (NPHVA).

Mr Ang Hin Kee, who’s the advisor to NTA and NPHVA, said:

“Both the National Taxi Association and the National Private Hire Vehicles Association have shared drivers’ concerns with LTA and CCS. In particular, irrespective of this acquisition outcome or alliance among fleet and apps operators, drivers & commuters must be able to access options & choices.”

The IMD will require Grab to ensure that Uber drivers joining Grab’s ride-hailing platform of their own accord are not subject to any exclusivity clauses, lock-in periods and/or termination fees.

READ MORE:  5 x 5: Wall Street Journal calls out PM Najib’s wife for S$8 million credit card spree

Of course, the IMD still doesn’t address drivers’ concerns about how their incentives and earnings will be affected as Grab and Uber merge. And the IMD are… well… interim. Even if the CCS eventually blocks the merger, it might only be delaying the inevitable. The better option is for there to be proper competition amongst competent, progressive, and innovative service providers.

Enter new competition

Thankfully, it looks like there might be a new player entering the space to compete against Grab. Homegrown carpooling app Ryde announced it will be launching RydeX, its new private-hire car service. Currently, Ryde already has a combined fleet of more than 55,000 drivers – both private cars and taxis – that serve 300,000 passengers a day. It plans to have 5,000 full-time drivers. It has already started accepting sign-up of full-time drivers via the Ryde app.

RydeX could provide the alternative to Grab for consumers and drivers. Terence Zou, CEO of Ryde Technologies, said:

“We hope to provide commuters a cheaper alternative to get around and drivers a way to make a decent living. Ultimately, our mission is to make a positive social impact in people’s lives.”

With luck, RydeX would fare better against Grab than Uber. At the same time, let’s hope that the taxi companies also innovate and transform their business model so that they can compete effectively and efficiently against Grab.

Lesson to learn from this

This whole saga teaches us a few lessons.

First, any incumbent in any industry needs to continue to innovate or be prepared to lose. The taxi companies in Singapore had long been too comfortable. As a result, they didn’t innovate. Then came Uber. And the taxi companies suffered. Then came Grab. Which grabbed away Uber’s business. If the taxi companies learn this lesson well, then we would have a better chance at being sure that no single company will monopolise the market.

READ MORE:  Uber and Grab taking us for a ride? Really?

Second, we need to have a strong union to advocate for the rights of workers. In this case, the workers are the drivers. And, while they technically don’t have a union, they have the NTA and the NPHVA to advocate for their interests.

The NTA and NPHVA still has much work ahead of them. The industry  is far from being settled. It is still undergoing various disruptions. To ensure that the interests of drivers are best served even as the industry continues to change, the NTA and NPHVA will have to continue to be vigilant, thinking and planning ahead, to ensure that drivers’ interests are taken care of.

If we can learn these lessons, then the continued transformation of this CPPT industry will benefit consumers and drivers. If we don’t… well…

 

 

Don't be selfish... Click here to share this on Facebook!

If you like what you read, follow us on Facebook to get the latest updates.

Jake Koh

Author Jake Koh

Recovering sushi addict, I'm a man of mystery and power, whose power is exceeded only by his mystery.

More posts by Jake Koh

Leave a Reply