NASDAQ-LISTED ride-hailing company Grab has acquired Singapore taxi operator Trans-cab.

Grab announced the signing of an agreement on Thursday (Jul 20), where its subsidiary Grab Rentals acquired 100 per cent of the shares of Trans-cab. Trans-cab is the Republic’s third-largest taxi company, and was privately owned.

Trans-cab representatives did not reveal the cost of the buyout, but according to The Straits Times, it was around S$100 million.

The agreement includes Trans-cab’s taxi and vehicle rental business, its 2,500-vehicle fleet – consisting of 2,200 taxis and 300 private-hire vehicles – as well as its maintenance workshop and fuel pump operations. The company will continue to operate as per normal, Trans-cab’s general manager Jasmine Tan told The Business Times.

The move is a “strategic match with win-win outcomes for all”, said Yee Wee Tang, Grab Singapore’s managing director, adding that more drivers on the platform means quicker and more reliable rides for its users.

Grab stated that Singapore has “faced an industry-wide driver supply crunch” since the pandemic, which has resulted in higher prices on its platform. The boost to its number of drivers would “benefit passengers with more reliable allocation, especially during peak hours”, and Trans-cab’s maintenance facilities could allow for improved operations and reduced costs.

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The acquisition will help Trans-cab make a digital shift which will help “ensure (its) taxi drivers can continue to be competitive”, added Tan.

Grab said that it will launch an “enhanced Grab Driver application”, which will work with the mobile display units inside Trans-cab’s vehicles, and enable the drivers to utilise the Grab platform to receive bookings and manage earnings.

In the near future, it may also introduce a pilot programme to use large, in-vehicle displays for drivers to manage all jobs and navigate on a single platform.

Grab also said that Trans-cab drivers will receive the same benefits as its current drivers, which includes its Personal Accident Insurance, skills training through GrabAcademy, and rewards through its loyalty programmes. Walter Theseira, an associate professor of economics at the Singapore University of Social Sciences, said the prime reason for a platform to buy over a taxi company would be to expand its pool of drivers rather than profits from vehicle rental operations, since such platforms have been “struggling to meet demand” post-Covid. He also expects other platforms with financial resources to consider similar moves.

The acquisition is a “significant development” for the industry, said Yeo Wan Ling, an adviser to the National Taxi Association, and that more options to increase ridership and adopt new technology would help Trans-cab’s drivers “see improvements to their livelihoods”.

She also said that the association would continue to work with Grab’s management on driver concerns, including “queries on existing contracts, the adoption of new technology and smooth onboarding onto the ride-hailing platform”.

Trans-cab was founded in 2003 by its chairman Teo Kiang Ang, and is the third-largest taxi company in Singapore, after ComfortDelGro and SMRT-owned Strides. The company previously attempted an initial public offering (IPO) twice. Its first attempt in 2014 was sunk by a letter questioning outstanding insurance payments it allegedly owed. In January 2020, it aborted a second IPO attempt, citing bad market conditions as a result of Covid-19, and said it was counselled by advisers to “adopt a prudent approach to let markets settle down before reassessing the situation”. Sources said the company sought a valuation of S$200 million in the second attempt, which was more than half of its 2014 IPO target.