Technology and competition

TECHNOLOGICAL innovations are meant to bring about the advantages of efficiency, as well as better and cheaper access to services for all and sundry.

The financial technology (fintech) revolution, for example, has a big focus on reaching the unbanked. And we all know about ride-hailing applications.

Grab and Uber have made ride-hailing a cinch for commuters and in many cases cheaper, considering the competition they injected into the system. But now, they themselves are being called into question – the Competition Commission of Singapore (CCS) now says it has “reasonable grounds” to suspect that the merger of Grab and Uber has infringed the Competition Act.

The CCS pointed out that the merger may lead to “substantial lessening of competition” for the private-hire car industry in Singapore. That may very well be the case.

The first point to note is that for the CCS to come up with this ruling is a major step in the right direction, considering that it was not that long ago when governments and regulators were calling into question the legality of the very existence of companies such as Grab and Uber.

Secondly, it should be noted that the two companies could enter into arrangements that reduce the occurrences of anti-competitive behaviour to the satisfaction of the competition body.

This would then pave the way for them to still go ahead with their merger. The point to note, however, is this: that if in fact consumers feel that they are not getting a good deal from the Grab-Uber establishment, this could potentially lead to new innovations. Remember that technological innovators are constantly on the lookout for problems to solve.

Already, there are the blockchain enthusiasts who believe that applications such as Grab or Uber or Airbnb, which had disrupted certain industries, are themselves poised to be disrupted. This is because the blockchain protocol enables the decentralisation of just about everything, with peers of the network communicating and transacting with each other in a fair, safe and efficient manner.