The Competition and Consumer Commission of Singapore (CCCS) has decided to lift the restrictions it had imposed on ride-hailing decacorn Grab in September 2018 following its merger with Uber.
In a media statement, the commission said the decision follows the city-state’s new point-to-point (P2P) transport regulatory framework which came into effect on October 30.
The lifting of the restrictions imposed on Grab by the CCCS clears the way for the Southeast Asian giant to introduce additional charges for its services. According to a report by Business Times Singapore, Grab is set to add a platform fee of about S$0.30 for its ride-hailing services.
“The industry-standard platform fee will enable us to maintain and improve safety measures, cover relevant operating costs as well as look after our driver-partners’ welfare sustainably. We hope to roll it out in the next few months,” Andrew Chan, Managing Director, Transport, Grab Singapore said in a press statement.
“This will be the only change we will be making to our fares for the time being… we are committed to maintain the current pricing structure and policies for at least the next six months given the COVID-19 situation,” he added.
The P2P Bill, passed by parliament in August last year, requires all companies providing ride-hailing services, with a fleet size of more than 800 vehicles, to obtain Ride-hail Service Operator Licences (RSOLs).
Though COVID-19 temporarily delayed the implementation of the regulation, Singapore has since seen several companies such as ComfortDelgro and Tada Mobility, as well as Gojek and Grab being granted the said licence.
The regulatory framework, the watchdog says, ensures that licensed operators cannot prevent their drivers from working for other operators. It also ensures that P2P fares are transparent and clearly communicated to commuters, while leaving fare levels to be determined by market forces.
“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 said in the release.
In March 2018, the CCCS investigated the Grab-Uber merger. In the deal, Uber took a 27.6 per cent stake in Grab, paving the way for the US company’s exit from Southeast Asia. The commission later found that the deal had substantially lessened competition, noting in particular Grab’s subsequent move of increasing prices and making changes to its loyalty programme.
Following its findings, the CCCS issued directions which sought to maintain Grab’s pre-merger pricing, pricing policies, and product options and to remove all exclusivity obligations imposed by Grab on drivers and taxi fleets in Singapore.
Before the watchdog’s U-turn, Grab had submitted an application to the commission requesting to add a platform fee for its ride-hailing services in Singapore. With the lifting of the directions, however, CCCS says it will no longer issue a decision on the application.
The move comes as Grab is preparing for a potentially “long winter”, according to co-founder Tan Hooi Ling, as its revenues took a severe hit from the coronavirus outbreak. The following month, the ride-hailing platform laid off about 360 employees, representing about 5 per cent of the company’s total workforce, citing the severe impact of COVID-19 on its business and the foreseen prolonged recession as a result of the pandemic.
