Last March we saw another closing chapter in the sad fall of once-mighty international ride-hailing service Uber in the Southeast Asian market. Following a titanic struggle to compete with regional heavyweight ride platform Grab from Singapore, the American company not only quit the scene but even offered its business there to Grab Inc. in a merger of assets. In return, Uber gets a stake in the Singaporean company. This all sound well and good, especially to Grab which is eager to do greater things once they have Uber SEA’s former operations capabilities. But it will have to pass antitrust scrutiny.
That, according to CNN Philippines, has been achieved as of Friday, August 10. After near on five months without further word on the Grab-Uber SEA merger, the Philippine Competition Commission (PCC), the national antitrust regulator, gave the okay for the former Uber assets to be absorbed by grab. However, to facilitate that, the Singapore ride-hailing giant will need to comply with a number of conditions before it formalizes its takeover of the former Uber offices, based in the Philippines. This involves the restoration of certain pricing ranges and service quality that has long hounded the ride-hailing business in Southeast Asia.
To wit, Grab is expected to work on reducing – to around 5 percent – Its recently alarming rate of ride cancellations that has been plaguing the company’s drivers in the country. The PCC has reported complaints by prospective Filipino customers on how they needed to use the Grab app several times to hail a vehicle, a trend that has grown “persistent”. They have 12 months to do so. Next, official ride receipts from Grab must now include a detailed fare breakdown, showing details like availed discounts, rate surges and waiting times.
Thirdly, Grab must – under threat of a P2 million penalty if unmet – to set prices that go way beyond minimum allowed fares for ride-hailers. Exclusivity clauses that would tie drivers and operators to Grab are also prohibited; so is the policy of “destination masking”. For the drivers’ benefit, Grab must also implement a program to reward safety-conscious drivers and finally, company transparency on the company’s monthly reports outlining driver incentives. All these conditions, seven distinct rules in all, are effectively immediately following the PCC green-lighting the Grab-Uber merger this Friday.
“The PCC’s commitment decision holds Grab to a standard as if Uber were present in the market,” declared the antitrust regulatory body in an official statement. “In effect, while Grab operates as a virtual monopolist, the commitments assure the public that quality and price levels that would prevail are those that had been when they still faced competition from Uber.”
Image courtesy of says.com