Singapore Competition Commission to further assess Uber's partnership bid with local taxi operator

Competition Commission of Singapore says it needs more time to review ComfortDelGro's proposed bid to acquire a 51 percent stake in Uber's rental car business, after an initial assessment has failed to determine if competition issues will not arise.
Written by Eileen Yu, Senior Contributing Editor

Singapore's competition watchdog says it needs to further assess and ascertain that local taxi operator ComfortDelGro's proposed bid to acquire a 51 percent stake in Uber Technologies' car rental business, will not infringe anti-competitive guidelines.

The Competition Commission of Singapore said it had completed an initial review, but was "unable to conclusively determine that competition issues will not arise". This two-phase approach was typically adopted by the commission to assess proposed mergers, encompassing an initial 30-day "quick assessment" and a longer 120-day in the second phase.

A statutory board under the Ministry of Trade and Industry, the commission noted that it had identified key issues that might affect market competition as a result of the proposed collaboration. These included a potential infringement of section 34 of the country's Competition Act, which prohibited anti-competitive agreements, as well as section 47 outlining abuse of dominant market positions.

It also pointed to ComfortDelGro's proposed acquisition as a potential issue related to section 54 against anti-competitive mergers.

The Singapore taxi operator in December 2017 announced plans to buy a 51 percent stake in Uber's local car rental business, Lion City Holdings, estimated to be worth S$642 million (US$475.64 million). The deal would mark ComfortDelGro's biggest to date and add another 14,000 vehicles to its rental fleet from Lion City Rentals, which was owned by Lion City. Uber would retain the remaining 49 percent stake in the company.

Uber and ComfortDelGro last month introduced their uberFLASH service as part of the proposed tie-up. Companies, though, typically were granted immunity from financial penalties until a formal decision had been made regarding planned mergers.

The Competition Commission said it would now proceed with an "in-depth assessment" of the collaboration, which would include a review of whether uberFLASH involved "coordination of pricing between competitors" and whether a flat-fare service would continue to be available to commuters.

Other issues also would be part of the review, including whether payment options for commuters would be reduced and if the ability of "certain players" to enter related businesses such as food delivery services would be affected.

Uber in Singapore currently its own food delivery service, called Uber Eats.

The Competition Commission said both companies had been instructed to submit further information, by March 5, to address anti-competitive issues identified in its initial review. It also would seek public feedback on the proposed collaboration.

Editorial standards