Uber-Grab deal faces a bumpy ride

Arab News - - BUSINESS -

MANILA: Philip­pines and Malaysia said on Mon­day they will look into whether Uber Tech­nolo­gies’ move to sell its South­east Asian busi­ness to ride-hail­ing ri­val Grab hin­ders com­pe­ti­tion, days af­ter Sin­ga­pore be­gan a probe into the deal on sim­i­lar con­cerns.

The ex­panded scru­tiny of the deal in South­east Asia could pose a ma­jor hur­dle to the US firm’s at­tempt to im­prove prof­itabil­ity by ex­it­ing its loss-mak­ing re­gional op­er­a­tion. It also comes as Grab is set to face tougher com­pe­ti­tion from In­done­sian ri­val Go-Jek.

In a rare move, Sin­ga­pore last week pro­posed in­terim mea­sures to re­quire Uber and Grab to main­tain their pre-trans­ac­tion in­de­pen­dent pric­ing un­til it com­pletes a review of the deal, say­ing it had “rea­son­able grounds” to sus­pect that com­pe­ti­tion had been in­fringed.

“The Grab-Uber ac­qui­si­tion is likely to have a far-reach­ing im­pact on the rid­ing pub­lic and the trans­porta­tion ser­vices. As such, the PCC is look­ing at the deal closely,” the Philip­pine Com­pe­ti­tion Com­mis­sion (PCC) said in a state­ment.

It said the deal will put Grab in a vir­tual mo­nop­oly in the rideshar­ing mar­ket, and its review will de­ter­mine whether the trans­ac­tion sub­stan­tially re­duces com­pe­ti­tion, adding it is meet­ing rep­re­sen­ta­tives of Grab and Uber on Mon­day.

Should anti-com­pet­i­tive con­cerns arise, Uber and Grab may pro­pose com­mit­ments to rem­edy. In the event they will not sub­mit vol­un­tar­ily, the com­mis­sion could open a case that may block the deal, it said.

Malaysia also said on Mon­day that it will mon­i­tor Grab for pos­si­ble anti-com­pet­i­tive be­hav­ior.

“We won’t take it lightly. We will mon­i­tor this be­cause it is still early days and we don’t know what will hap­pen next,” said gov­ern­ment min­is­ter Nancy Shukri, whose port­fo­lio over­sees the pub­lic trans­port li­cens­ing au­thor­ity.

“We have stressed that if there is any anti-com­pet­i­tive be­hav­ior, the Com­pe­ti­tion Act will come into force. We have spelt this out to them,” Shukri said, re­fer­ring to a meet­ing with Grab rep­re­sen­ta­tives last Mon­day.

In In­done­sia, the anti-mo­nop­oly agency said it can’t say yet whether they will in­ves­ti­gate the deal, as there are 30 days af­ter the deal is fi­nal­ized to as­sess it.

Uber and Grab an­nounced the deal a week ago, mark­ing the US com­pany’s sec­ond re­treat from an Asian mar­ket. It ear­lier sold off its op­er­a­tions in China.

Shukri said Grab, which is val­ued at about $6 bil­lion, had of­fered as­sur­ances dur­ing their meet­ing that there would be no un­fair pric­ing, nor would it in­crease its fares for now.

Af­ter a costly mar­ket share bat­tle in South­east Asia, where Uber has in­vested $700 mil­lion, its move to exit the re­gion is widely ex­pected to give the US firm more fire­power to fo­cus on other mar­kets in­clud­ing In­dia.

But com­pe­ti­tion in the re­gion is set to grow again, as In­done­sia’s Go-Jek plans to launch its first ex­pan­sion to an­other coun­try in the re­gion in com­ing weeks, ac­cord­ing to an in­ter­nal com­pany email seen by Reuters.

Sin­ga­pore’s Straits Times re­ported on Mon­day Go-Jek plans to launch its ser­vices in Sin­ga­pore, the Philip­pines, Thai­land and Viet­nam.

Jo­hannes Bern­abe, PCC com­mis­sioner, told Reuters that Manila is pro­cess­ing at least three ap­pli­ca­tions for ride-shar­ing ser­vices. It also caps the num­ber of ride-shar­ing ve­hi­cles to 65,000 across all brands and re­views them ev­ery three months.

PRIC­ING PROBE: Uber hopes to exit its loss-mak­ing re­gional op­er­a­tion through a deal with ri­val Grab. (Shut­ter­stock)

Newspapers in English

Newspapers from Saudi Arabia

© PressReader. All rights reserved.