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Singapore allows Uber's exit with antimonopoly measures

Watchdog orders Grab to maintain fares and driver commission rates

A notice for Uber drivers is displayed at Grab's registration office in Singapore. (Photo by Kentaro Iwamoto)   © Not selection

SINGAPORE -- Singapore's competition commission on Friday said Uber Technologies' ride-hailing service will terminate on May 7, effectively allowing the U.S.-based company to exit from the city-state. But the authority also ordered rival service Grab to follow measures to maintain an open market environment, including keeping pre-merger pricing and driver commission rates.

Singapore's decision will help Grab advance the service integration with Uber in Southeast Asia, and will allow the Singapore-based company to increase its market share regionwide.

The Competition and Consumer Commission of Singapore, in its Friday announcement, said: "To allow a smoother transition time for riders and drivers, the Uber ride-hailing platform will continue to be available in Singapore and terminate on May 7, with necessary customer support to handle contractual and payment issues."

A spokesperson for the commission told the Nikkei Asian Review that "Uber is not obliged to extend the app after May 7."

But the commission also ordered Grab to follow several measures to keep Singapore's ride-hailing market "open and contestable."

Those measures include directing Grab to not take over historical trip data and other operational data from Uber; to ensure that newly joined Grab drivers are not subject to any exclusivity obligations; and to maintain pre-merger levels of base fares, surge factors and driver commission rates.

In addition, the authority asked the two operators to communicate through an email to Uber drivers and riders that "migration to Grab is purely optional."

The measures are necessary due to the current competition environment, the commission said. It noted that Grab and Uber are "each other's closest competitors and have a significant combined market share," as well as that the entry barriers are likely to be high.

"In particular, many drivers are constrained by exclusivity arrangements such that they can only drive for one ride-hailing platform," it said in the statement. "This makes it difficult for a new ride-hailing platform to attract drivers."

The measures take effect immediately, the commission said, and will be in effect until the completion of the investigation and "resolution of any competition concerns." An independent trustee will monitor the compliance, the authority added.

Grab and Uber announced a merger deal last month, saying their services would be integrated under the Grab name in the eight Southeast Asian markets where the two companies had previously competed.

Uber ended its ride-hailing services at midnight on April 8 in six of the eight markets: Indonesia, Thailand, Malaysia, Vietnam, Cambodia and Myanmar. Authorities in the Philippines have yet to approve Uber's exit.

Singapore started the antimonopoly investigation a day after the merger deal was announced, and on March 30 it proposed the interim directions to preserve competition, saying the commission had reasonable grounds for suspecting that the merger is an infringement of the competition law. Grab and Uber on April 4 submitted a counter proposal to the commission and had agreed to extend Uber's operations until April 15.

Thousands of drivers in Singapore joined Grab after the merger announcement, the company said.

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