If Competition Commission of Singapore (CCS) finds reasonable evidence against competition infringement, the Uber-Grab merger might well take a setback. In its latest press release, the CCS said, it had found reasonable grounds to start an investigation into the proposed merger.
A due investigation has been underway in this context. In its interim instructions, the Singapore’s watchdog asked both the companies to maintain their pre-transaction pricing.
On the other hand, Grab voluntarily came forward and issued a statement that it is committed to serving its consumers, and will not be increasing the base fare. The recently proposed measures by the CCS may hold the US company’s dream of exiting from the South East Asian market. Uber preferred to walk towards profitability, rather than compete with Grab, and incur heavy losses.
Business analysts welcomed the move, a first of its kind on any business in the country, by the country’s watchdog. According to close sources, that working with Grab and Uber, ‘the merger is likely to create a monopoly in the ride-hailing segment.
According to the measures proposed by CCS, the Uber drivers who will be joining the Grab platform are not entitled to follow any special Grab clauses, termination fees, and/or lock-in-periods. At the same time, the companies should not exchange confidential information like pricing strategies, formulas, drivers, and customers, with each other.
Official sources quoted that, this is the first time CCS is exercising these powers. The CCS was not intimated about the Uber-Grab merger officially. The companies will be given an opportunity to write their representations to the Competition Commission of Singapore, in a bid to proceed with the merger.
The proposed merger can lead to an increase in fare from the companies, in their mission to turn profitable. With the issue under CCS’s nose, it will be interesting to see what direction Uber – Grab deal will go.