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Singapore taxi operator acquires majority stake in Uber's car rental business

ComfortDelGro is forking out S$642 million for a 51 percent stake in Uber-subsidiary, Lion City Holdings, which runs a fleet of some 14,000 vehicles.

Singapore taxi operator ComfortDelGro has announced plans to acquire a 51 percent stake in Uber's local car rental business, Lion City Holdings.

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.

If approved by authorities, the deal would enable Uber customers to book rides on ComfortDelGro's taxis via the former's ride-sharing app, said the Singapore company in a statement Friday. It added that new services from the new partnership were being planned and would be launched in the coming months.

ComfortDelGro operated a fleet of 16,822 taxis branded under Comfort and CityCab, as well as 1,105 cars under its own Rent-A-Car rental and leasing service.

ComfortDelGro Chairman Lim Jit Poh said: "ComfortDelGro has been in the taxi business for close to five decades and we have seen the industry evolve significantly. Despite the many changes that have taken place, taxis have remained a relevant option for people get around the city. The question many have been asking is: For how long?

"We are confident that taxis will be around for a long time to come, but we are also aware that the personalised mobility business is a very different one now. Private hire vehicles, with the advent of innovative apps like Uber, have changed the way in which consumers use public transportation and have created a more efficient use of existing resources," Lim said. "By working together, we feel that we will be able to unleash a lot of synergy which will benefit consumers and drivers alike."

ComfortDelGro CEO Yang Ban Seng added that the partnership would enable the company to tap Uber's technology as well as offer consumers more choice and shorter wait for their ride.

The Singapore company's local businesses encompassed bus, rail, and inspection and testing services, amongst others. It also had operations in China, the UK, Australia, Vietnam, and Malaysia.

Uber last month was investing a spate of unauthorised transactions reported by customers here, which it said were not linked to the data security breach that had compromised 57 million accounts worldwide. These Singapore users had discovered charges made to their accounts and credit cards for rides they never took, including taken outside the country and paid for in foreign currencies.

In August, Uber also reportedly leased more than 1,000 vehicles that had been cited for a recall over a fire risk and after one such vehicle caught fire earlier this year on Singapore roads.