Competition watchdog lifts directives on Grab; firm to introduce 30-cent ‘platform fee’ for ride-hailing services in Singapore

21-Nov-2020 Intellasia | Malay Mail | 12:37 PM Print This Post

Grab is now free to adjust its fares, driver commission rates and make other changes to its service offerings. Singapore’s competition watchdog said that it would release the directives imposed on the ride-hailing firm after its merger with Uber in 2018.

The Competition and Consumer Commission of Singapore (CCCS) announced yesterday that with a new regulatory framework for the point-to-point transport sector introduced on October 30, it would release its directives with immediate effect.

The regulatory framework awarded ride-hailing licences to five firms, including Grab’s private-hire car service GrabCar.

It ensures that fares for point-to-point transport services are transparent and clearly communicated to commuters, while leaving market forces to determine fare levels.

In a statement issued soon after CCCS’ announcement, Grab said that it would be “prudent” with its pricing structure and policies.

For the time being, the only change it would make to its fares is a 30-cent “platform fee” for its ride-hailing services. This will be rolled out in the next few months.

Grab also said that it was committed to maintaining its current pricing structure and policies for at least the next six months, given the Covid-19 situation.

‘Timely’ to release directives

Under the CCCS directives that kicked in on September 24, 2018, six months after the merger, Grab was ordered to maintain its pre-transaction pricing, pricing policies and product options, including driver commission rates and structures, for all products on its platform.

It was also ordered to remove exclusivity arrangements with any taxi fleet to increase choices for drivers and passengers.

The watchdog imposed the directives as part of an infringement decision against Grab and Uber after the sale of Uber’s Southeast Asian business to Grab in March 2018.

As part of the deal, Grab, which is based in Singapore, took over Uber’s ride-sharing and food-delivery business in the region.

The American ride-hailing firm, in turn, got a 27.5 per cent stake in Grab, and its chief executive officer Dara Khosrowshahi joined Grab’s board.

CCCS later pronounced that the deal had breached Singapore’s Competition Act and substantially reduced competition in the sector. Grab also raised its fares after the acquisition, the commission found.

CCCS said that with the government’s new regulatory framework for the sector, there are a number of operators in the point-to-point transport sector right now. Apart from Grab, the other licensed operators are Comfort Transportation run by ComfortDelGro, Velox Digital Singapore more commonly known as Gojek as well as Tada Mobility, the newest entrant to the ride-hailing scene.

A fifth company, Ryde Technologies, was given a provisional one-year licence and must fine-tune its operations to meet regulatory standards to be considered for a full licence.CCCS said: “With a sectoral regulatory framework now in place, CCCS considers it timely to release the directions imposed on Grab, as the issues identified are more appropriately considered and addressed within the context of the sectoral regulatory framework.”

It added: “CCCS will continue to work closely with the Land Transport Authority and Public Transport Council to ensure that the point-to-point sector remains open and contestable.” With the directives being lifted, CCCS added that it would no longer issue a decision on Grab’s earlier application to impose the 30-cent platform fee.

Andrew Chan, managing director for transport at Grab Singapore, said the fee which will be 32 cents with Goods and Services Tax would help the firm maintain and improve safety measures, cover other operating costs and look after the welfare of its driver-partners in a sustainable way.

He added: “We will continue to strive to be the preferred choice for our passengers and provide a viable earning platform to our driver-partners by offering relevant services at competitive prices.”


Category: Singapore

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