China’s top ride-sharing firm eyeing Philippines
CHINA’S biggest ride-sharing company Didi Chuxing is in talks with a Filipino group in a bid to end Grab Philippines’ virtual monopoly in the country, the Inquirer has learned.
Didi’s entry in the Philippines – potentially the latest in its global expansion – will bring down prices and offer more options for commuters, said Ilocos Sur politician Luis “Chavit” Singson, who confirmed ongoing negotiations with Didi.
“We want to break the monopoly of Grab,” Singson said of the Singaporebased ride-sharing giant in an interview last week.
Singson owns U-Hop Transportation Network Vehicle System Inc (U-Hop), one of 10 Transport Network Companies ( TNC) allowed to operate ridesharing services in the Philippines.
U-Hop is renewing its accreditation before the Land Transportation Franchising and Regulatory Board (LTFRB), which last year issued a moratorium on the issuance of new TNC licences.
Singson was unable to provide further details on the group’s discussions with Didi. Officials from Didi and the LTFRB did not immediately respond to requests for comment on Thursday.
As a public utility, TNCs are bound by the 40 per cent foreign ownership limit set by the Philippine constitution. Didi will need to comply with the cap if it is to avoid the fate of Indonesia’s Gojek, which last year was denied a licence by the LTFRB for failing to meet the local ownership requirement.
Didi is one of the world’s largest mobile transport platforms. It offers a host of services from on-demand cars to e-bike sharing and food deliveries to more than 550 million users across Asia, Latin America and Australia, its website showed.
“We think this will help Filipinos,” said Singson, a former governor and now mayor of Narvacan. He also chairs LCS Holdings and owns a range of businesses such as bus operator Partas, car dealerships and more recently, the construction of cell towers.
Singson said the ride-sharing opportunity was significant and that Filipinos would warm up to a new player amid complaints that fares have shot up in the wake of Grab’s March 2018 acquisition of the Southeast Asian operations of US-based Uber.
More than a year since the transaction, the Philippine Competition Commission (PCC) said the industry remained uncompetitive while Grab countered that price spikes were a sign of strong demand.
There are at least eight other TNCs apart from Grab Philippines and U-Hop but none came close to Grab’s estimated 90 per cent market share in the country.
The PCC, which once called Grab Philippines a virtual monopoly, had fined Grab and Uber millions of pesos for violating conditions set by the antitrust body.
Similar to Grab, Didi also reached its current scale by acquiring Uber in China.
Didi is also an investor in Grab as it joined Japan’s Softbank in a $2 billion investment round in 2017. Softbank, owned by Japanese billionaire Masayoshi Son, owns stakes in Uber, Grab, Didi and Ola, a ride-sharing service in India.