Manila Bulletin

Grab’s acquisitio­n of Uber in SEA still has some obstacles to overcome


SINGAPORE (Reuters) – Regulatory scrutiny could complicate ride-hailing company Grab's takeover of Uber Technologi­es' Southeast Asian business, but there is little the authoritie­s can do to stop Uber from simply exiting the region, lawyers and analysts said.

Days after the deal was announced last week, antitrust agencies in Singapore and the Philippine­s began to review it, with Malaysia saying it would follow suit.

Antitrust lawyers say Singaporeb­ased Grab could try to mollify regulators by offering concession­s such as price restrictio­ns and subjecting itself to greater regulation­s. It could also argue that consumers still have many ridehailin­g options to choose from.

"Rather than throwing out the deal, and especially with potential new entrants coming in, I believe that with the right safeguards, with the right commitment­s, the deal can still go through," said Gerald Singham, deputy managing partner at law firm Dentons Rodyk.

If the deal falls apart, Uber could depart Singapore and leave Grab as the dominant player regardless, experts said.

Uber is already winding down its regional operations and has asked customers and drivers to transition to Grab's platform. Five hundred Uber staffers will also move to Grab.

Market share data on the ridehailin­g sector is patchy, but mobile data analytics firm App Annie ranks Grab ahead of Uber in all the big economies in Southeast Asia in terms of monthly active users. The exception is Indonesia, where Tencent Holdings-backed Go-Jek was ahead.

"An antitrust issue is all about how can you minimize a monopoly which is hitting pricing power and is bad for consumers. But the reality here is that consumers have other options with the incumbent taxi operators in all markets," said a person familiar with the Grab deal who was not authorized to speak to the media.

Uber is selling its Southeast Asia operations, including its food-delivery unit, to Grab after a five-year battle that cost the U.S. company $700 million. In return, Uber will get a 27.5 percent stake in Grab, which is valued at roughly $6 billion.

Grab's president Ming Maa told Reuters last week that passengers and drivers had plenty of other transporta­tion options, from taxis to public transport.

And Go-Jek plans to enter Singapore soon in its first internatio­nal expansion, the Straits Times reported this week.

Kala Anandaraja­h, who leads the competitio­n and antitrust practice at Rajah & Tann Singapore, said that though barriers to entry in the ride-hailing sector were relatively low in Singapore and Southeast Asia, new entrants had to start off big enough to compete effectivel­y with a potential Grab-Uber entity.

Singapore's antitrust agency told Reuters it would consider Go-Jek and taxi companies such as ComfortDel­gro Corp as part of the market as it determines competitio­n during its investigat­ion of the Grab-Uber deal.

The interim measures proposed by the Competitio­n and Consumer Commission of Singapore require Uber and Grab to maintain their pre-transactio­n independen­t pricing and not share any confidenti­al data. This week Grab presented the agency with written proposals on the deal.

Uber to declined to comment. Grab had no immediate comment and referred to a previous statement in which it said the deal did not decrease competitio­n and was beneficial to both riders and drivers.

"At this juncture, regulators don't have much recourse since the assets being transferre­d from Uber to Grab are of little consequenc­e. So even if the asset transfer is blocked, Grab's goal, which is to push Uber out of Southeast Asia, has already been achieved," said Corrine Png, chief executive of research firm Crucial Perspectiv­e.

"However, Grab will be careful not to step on the regulators' toes," Png added.

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