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ComfortDelGro to acquire 51% stake in Uber's car rental subsidiary Lion City Rentals
[SINGAPORE] Taxi giant ComfortDelGro announced on Friday (Dec 8) its intention to acquire a 51 per cent stake in the Uber-owned rental car business, Lion City Holdings.
This news come more than three months after a possible alliance with Uber was first announced, ending speculation about the nature of the deal.
Lion City Holdings operates Lion City Rentals, which has a fleet of about 14,000 vehicles. Uber will retain the remaining 49 per cent.
In a statement, ComfortDelGro said the deal, which is subject to regulatory approval, is valued at about $642 million, with a cash consideration of $295 million.
It ranks as ComfortDelGro's single largest deal to date, said the firm.
"Upon completion of the transaction, Lion City Rentals will be able to benefit from ComfortDelGro's world-class fleet management and operations, which will be in the interest of drivers and consumers alike," said ComfortDelGro.
ComfortDelGro added that taxi drivers will also be able to receive ride requests on the Uber driver app, thereby increasing their potential earnings and allowing customers the option of booking a ComfortDelGro taxi through the Uber app.
The joint venture between ComfortDelGro and Uber ups the ante in the competition with ride-hailing rival Grab, which has been aggressively wooing ComfortDelGro's taxi drivers to join them, by dangling guaranteed fare earnings and rental rebates.
Grab has also inked partnerships with the other five taxi companies - Trans-Cab, SMRT, Prime, Premier, and HDT Taxi Singapore - for its cabbies to use its app.
The size of ComfortDelGro's taxi fleet has shrunk by more than 14 per cent - as of October this year it had 14,306 cabs across its Comfort and CityCab brands, down from 16,722 cabs in the same time last year.
THE STRAITS TIMES