Focus View
MyCC, SPAD must scrutinise Grab-Uber merger
FocusM team | 30 Mar 2018 00:30
NOW that Grab will be acquiring Uber’s Southeast Asian business, it is appropriate to ask whether the deal will indeed result in greater benefit to consumers or otherwise.  

With the end of the Grab-Uber duopoly, some quarters are questioning whether the eventual dominance of Grab in the ride-hailing sector will result in a monopoly. Given Grab’s  innovative and savvy business practices, it is unlikely to flex its “monopolistic power” by raising rates. 

Interestingly, Singapore’s Competition Commission was unaware of the deal and is asking for further details from both Grab and Uber. Locally, the Land Public Transport Authority (SPAD) has assured it will work with the Malaysia Competition Commission (MyCC) to safeguard passengers from unfair terms.   
However, concerns about the merger are more than just about the possibility of a rate hike by Grab. The big question is whether competition will be stifled by the merger. Will it also raise the entry barrier for other ride-sharing players trying to enter the market? 

Since one of MyCC’s key policies is to promote and protect competition in the market, having a single player dominating the ride-hailing sector via a merger might be a violation of the Competition Act 2010. MyCC needs to investigate to ensure the merger does not inhibit “fair and competitive market opportunities”, as stated as part of its policy. 

Free market policies should govern business deals. But if business deals threaten healthy industry competition, the regulators will need to act. 

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