Uber to Appeal Fine over Merger, While Grab Looks to Pay $6.58 million

Published by on . Updated on 18 May 2020

Uber and Grab Office(Photo Credit: Reuters)

Uber is appealing the fine imposed by Singapore’s competition watchdog for merging with Grab. On the otherhand, Grab will pay their part of the fine, saying they didn’t want the matter to ‘drag on’.

In a statement made on Monday (22 Oct), Uber has decided to appeal the Competition and Consumer Commission of Singapore’s (CCCS) decision over its merger with Grab back in March.

The decision made last month was that the two ride-hailing company violated Singapore’s competition laws. The companies were fined a total of S$13 million. The CCCS also imposed restrictions on their operations to ensure the ride-hailing market in Singapore remains fair and competitive.

The watchdog fined Uber and Grab S$6.58 million and S$6.42 million respectively. Uber said it was making their appeal as an individual company, independently of Grab, as a matter of principle.

The CCCS said the Uber-Grab merger led to a substantial lessening of competition and that Uber had known they were breaking the law. In its statement, Uber said the CCCS’ conclusion was ‘unsupported and incorrect’. It has asked the CCCS to nullify the S$6.42 million fine.

The California-based company added that the competition watchdog had used a very narrow definition of the ride-hailing market. As an example, Uber cited Go-Jek, an Indonesian ride-hailing company, which is joining the Singapore ride-hailing market next month.

Talking about Go-Jek’s impending arrival in Singapore, Uber said they would be a formidable competitor in the ride-hailing market. Uber also disputed the CCCS’ claim that the company knew the merger broke the law, but still moved ahead.

Uber said, “to the contrary, our view has always been that in a properly defined market — including at the very least ride-sharing, street-hail taxis and new entrants — the transaction respects the law and does not raise significant concerns.”

Back in March this year, Uber sold the South-East Asian portion of their business to its regional rival, Grab. In exchange for the sale, Uber got a 27.5% stake in Grab’s business. However, the deal attracted scrutiny from regulatory bodies.

Meanwhile, Grab has taken a different route from Uber. When asked by TODAY, Grab said that the locally based company would not be appealing their imposed fine of S$6.42 million.

“We are committed to operating in an environment that best serves our customers. We are now fully focused on improving the Grab experience for users, partners and merchants,” said Lim Kell Jay, head of Grab Singapore.

Mr Lim also told the Straits Times that Grab has decided to accept the CCCS’ decision and pay the fine. He added Grab didn’t want the matter to ‘drag on’, despite the company disagreeing with certain sections of the watchdog’s findings.

“There were a bunch of directions that were imposed, and there was a fine. We are planning not to appeal. We will adhere to all the directions set out, and we will pay the fine. We are glad this whole episode is over, and we can focus on serving our customers again,” Mr Lim said.

Mr Lim also said the fine was “no small sum”, but it “will not impact our daily operations... that will go on as normal”.

With Go-Jek arriving in Singapore soon, Mr Lim was asked how the Indonesian ride-hailing company’s arrival would affect Grab.

Mr Lim said, “Go-Jek, like all competitors who've come into the market in the past, like Uber and EasyTaxi, they have always pushed us to be better, to be more innovative. Each time a competitor comes in, it pushes us to change our course a little bit.”

“I don't know yet, but we need to remain relevant to our customers,” said Mr Lim, when asked how Grab will respond to Go-Jek’s arrival.

He also added that they might “accelerate its super-app plans” to compete with Go-Jek. Grab’s ‘super-app’ is meant to offer their customers a wide range of services apart from just booking private-hire rides. Such a ‘super-app’ would be in direct competition with Go-Jek’s app, which offers on-demand massages and cleaning services, for example.

Last week, Uber and Grab got fined once again, this time, in the Philippines. The Philippines’ competition watchdog said the two firms completed their merger too quickly. The watchdog added that as a result, the quality of services provided by Grab took a hit.

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