GRAB ACTUALLY ISN’T A MONOPOLY – HERE’S WHY
A fair and sustainable point-to-point transport industry is more about regulation than competition.
TTHE quagmire which the Competition and Consumer Commission of Singapore (CCCS) has found itself in with regards to ride-hailing firm Grab’s takeover of rival Uber’s South-east Asian business is not of its own doing.
For the past six months, the CCCS has been trying – with limited success – to get Grab to undo the “lessening of competition” which its acquisition of Uber’s regional operations has apparently given rise to.
The issue, really, is not about whether such a move has led to less competition. The answer to that is pretty obvious. Any drop-out of a competitor will lead to less competition.
The issue is whether it has led to a monopolistic situation. The answer to that is also pretty obvious. It has not. Grab is still facing a fair amount of competition from taxi operators and an ever increasing number of wannabe hailing apps. One would think the very nature of competition is its perpetual flux. Players come and players go. As long as there is no monopoly, should the CCCS be concerned?
The commission, however, is finding itself in murky waters which should not have been there in the first place. That is, if Singapore had recognised Uber and Grab for what they were at the very start.
They are essentially taxi companies. (Of course, Grab is now trying to position itself in various other industries, but when it arrived here along with Uber in 2013, it was a taxi company.) And taxi companies should be regulated like taxi companies. After five years, the Land Transport Authority (LTA) is finally recognising that, and has put in place a regulatory framework for ride-hailing firms. It may be too little, too late. Soon after Grab and Uber arrived here, The Straits Times asked the LTA why they did not have to follow regulations