Competition watchdog bans Grab from using Uber's data to win market

It also wanted Grab and Uber to retain their pre-transaction pricing and product options for riders and drivers.

The Competition and Consumer Commission of Singapore (CCCS) imposed Interim Measures Directions (IMD) to Grab and Uber after the former acquired the Southeast Asian operations of the latter. The key measures include the removal of exclusivity obligations on drivers, the prevention of Uber’s operational data from being used by Grab "to enhance its market position," the preservation of pre-transaction pricing and commission levels, and the assurance drivers and riders are free to choose their preferred platform.

According to an announcement, there are other directions which, due to market confidentiality, cannot be published. The IMD takes effect immediately and will stand until the completion of CCCS’ investigation into the competition concerns of the deal.

"The IMD prevents action by the Parties that may prejudice the giving of any subsequent direction by CCCS in any manner after reviewing the merger," CCCS said.

CCCS noted that the deal makes it hard for new players to enter the market. "Many drivers are constrained by exclusivity arrangements such that they can only drive for one ride-hailing platform. This makes it difficult for a new ride-hailing platform to attract drivers," it added.

"Further, a new entrant would likely have to invest a significant amount of upfront capital in order to attract drivers and riders to move over from the incumbent ride-hailing platform, so as to build up a critical mass of users.The new entrant would likely have to continue sustained investment in order to compete with the incumbent ride-hailing platform," CCCS said.

An independent monitoring trustee shall be appointed to monitor the compliance of the IMD. Under the IMD, Grab must not subject new drivers to exclusivity, lock-in periods, and termination fees, and that it must communicate to drivers who rent a vehicle from Lion City Rentals (LCR) that they are free to drive for any ride-hailing platform and must not be penalised for it.

Grab is also required to kill off its exclusivity arrangements with all taxi fleets in Singapore, provided that "(a) there are no exclusivity arrangements in Singapore between any taxi fleets and any third-party ride-hailing platform other than Grab, and (b) that all taxi operators permit their respective taxi drivers to drive for any third party ride-hailing platform for metered and fixed fare jobs," CCCS said.

Grab is also banned from taking over Uber's operational data to enhance its market position. "Grab may, however, receive personal data of drivers, riders and merchants (e.g. names, contact details, and supporting documents for vocation licence applications) who have expressly opted in and moved to the Grab platform," the watchdog said.

CCCS noted that after the transaction was completed on 25 March 2018, Uber and Grab have immediately begun transferring their assets.

Uber and Grab must also retain their pre-transaction pricing and product options for riders and drivers, including the levels of base fares, surge factor and driver commission rates. They are also required to tell drivers and riders that they have a choice whether to migrate to Grab and are not required to download or use Grab’s ride-hailing platform.  

CCCS extended the availability of Grab in Singapore until 7 May 2018 with support to handle contractual and payment issues.

In a statement sent to Singapore Business Review, Grab Singapore head Lim Kell Jay noted that CCCS accepted their alternative interim measures. "We trust that the CCCS’ review takes into account a dynamic industry that is constantly evolving, highly competitive, and being disrupted by technology and new services. The interim measures should not have the unintended effect of hampering competition and restricting businesses that have already been investing in the country over the years," he said.

Grab said it understands the CCCS' objective of "giving drivers choice" and is fully supportive of extending our platform to all taxi drivers, including ComfortDelGro drivers who are still constrained from picking up JustGrab jobs.

Lim concluded, "We trust the government will continue to be pro-business in providing a path for startups to flourish and become sustainable businesses. We will work within the set constraints and continue to focus on building better products to compete, ensuring fairness for passengers and drivers, and cultivating the local tech talent pool through our regional R&D centre in Singapore."