Singapore’s competition watchdog looking into Grab’s proposed takeover of Trans-Cab: Alvin Tan

Singapore’s competition watchdog is looking into Grab’s proposed takeover of Trans-Cab, Minister of State for Trade and Industry Alvin Tan told Parliament on Thursday (Aug 3).

Responding to a question from Non-Constituency MP Leong Mun Wai, Tan said the Competition and Consumer Commission of Singapore (CCCS) had received Grab’s notification of the proposed acquisition.

“CCCS will assess the impact of the proposed acquisition on competition and consult relevant stakeholders before reaching a decision on the matter.”

A public consultation will be done, Tan added.

On Jul 20, The Straits Times broke the news that Grab, the dominant ride-hailing operator here, would be acquiring Singapore’s third-largest taxi operator Trans-Cab by the fourth quarter of 2023. The deal is subject to approval from the authorities.

The acquisition includes about 2,200 cabs and more than 300 private-hire vehicles that Trans-Cab owns. It also includes Trans-Cab’s vehicle workshop and fuel pump operations.

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Leong, who is from the opposition Progress Singapore Party, had asked if CCCS would evaluate the proposed acquisition for anti-competitive practices.

He also wondered if the competition regulator would put in safeguards to ensure Grab does not disadvantage taxi drivers from other firms post-acquisition, and if it would assess the impact of the recent consolidation of the taxi industry on consumers.

Leong later asked if the authorities had studied the impact of Grab’s previous acquisition of Uber’s regional business on fares, waiting times, and the incomes of taxi drivers and driver-hirers.

He also asked if CCCS would consider as part of its assessment the fact that Grab already commands up to 75 per cent of the ride-hailing market here.

In response, Tan said he could not comment on the case under consideration.

He said CCCS has a two-stage evaluation approach towards merger applications.

The first phase of the review entails a quick assessment that will be completed in 30 working days. This is, however, subject to factors such as the time taken for parties to respond to requests for more information.

If the competition watchdog’s assessment is inconclusive, the application will undergo a more detailed review in a second phase, which is expected to take 120 working days, said Tan.

In response to ST’s queries, CCCS said it would issue a media statement to announce the start of the Phase 1 review upon receiving a complete application.

Tan added that information provided by third parties, including competitors and consumers, plays an important role in CCCS’ assessments of mergers.

Dr Tan Wu Meng (Jurong GRC) said some of his residents – both drivers and consumers – have been wondering what effects the proposed takeover might have.

He asked if the CCCS review would examine the takeover’s effects on a single combined market, or at the individual level of the taxi, private-hire car or point-to-point transport sectors.

Dr Tan also wondered if CCCS, in assessing a merger’s potential economic benefits, considers the possible “tripartite outcomes”. These include benefits to workers, the functioning of the labour market, and the bargaining power between workers and firms.

To that, Tan replied: “It’s worth saying that not all mergers... give rise to competition issues. Many, in fact, are pro-competitive or are competitively neutral.”

To determine if a merger is anti-competitive, CCCS will assess whether it leads to a substantial reduction in competition, he said.

Tan invited MPs and the public to take part in the public consultation exercise to give their views on the proposed acquisition.

In 2018, CCCS imposed S$13 million in financial penalties on Grab and Uber, after a six-month review concluded that the acquisition was anti-competitive. THE STRAITS TIMES