PCC orders Uber app to continue operations
The Philippine Competition Commission (PCC) has ordered ride-hailing service provider Uber to continue operating its app for the entire duration of its motu proprio review to protect the riding public which will be adversely affected as a result of monopoly by Grab following its acquisition of its rival Uber.
The directive also puts Grab’s move to acquire its competitor to a halt while the antitrust commission is reviewing the deal.
The PCC issued this ruling yesterday through Commission Order No. M-2018-001 adopting the Interim Measures on Grab’s acquisition of Uber in the Philippines.
Grab Holdings, Inc. (GHI) and MyTaxi.PH, Inc. (MTPH) has announced earlier to buy the assets of Uber B.V. (UBV) and Uber Systems, Inc. (USI) in Southeast Asia and has started to carry out the terms of its sale, including the migration of Uber drivers to its platform and the shutdown of the Uber app by April 9 in the Philippines.
In a bid to protect competition in a looming monopoly, the PCC issued a set of Interim Measures to ensure the welfare of the riding public and the drivers while the in-depth merger review of the Grab-Uber deal is ongoing.
“The PCC believes that Uber is capable of operating its ride-hailing app in the country, despite its claims that it has already exited the Southeast Asia market,” PCC Chairman Arsenio M. Balisacan said.
“Uber is highlighting its exit, but what it does not emphasize enough is its integration with Grab. Thus, Uber is not truly exiting the Philippine market, but rather effectively merging their operations with Grab here. The deal makes Uber a part-owner of Grab,” Balisacan said.
“This move by Uber in the Philippine market leads to further substantial concentration of what is, to begin with, an already highly-concentrated ride-sharing market. This virtual monopolization of the market by Grab can harm the riding public,” he added.
PCC conducted a public hearing with the representatives of the parties on Thursday regarding the imposition of interim measures.
The PCC has also imposed on Grab and Uber to maintain the independence of their business operations and other conditions prevailing prior to 25 March 2018, which include, ride hailing and delivery platforms; pricing and payment policies including incentives and promotions to riders; product options; customer and rider database; and on-boarding of new partner drivers as well as the fees, charges, and incentives to partner drivers, among other measures.
“Uber’s compliance with our antitrust counterpart in Singapore to extend the operation of its app indicates the feasibility of continuing its operations in the Philippines as well,” Balisacan said.
The PCC has the mandate to protect competition in the market and prohibit anticompetitive conduct, including mergers and acquisitions of businesses and companies that may substantially prevent, restrict, or lessen competition.
A merger or acquisition review using competition lens will determine whether the merger of two players in the ride-sharing market will substantially lessen competition. The PCC may prohibit any merger should anticompetitive concerns arise out of the transaction review.
PCC is mandated under the Philippine Competition Act to review mergers, acquisitions and joint ventures of firms across all sectors. PCC is committed to ensure that Grab’s acquisition of Uber in the Philippines will not harm the interest of the riding public.