Proposed Acquisition by Grab Rentals Pte. Ltd. of Trans-cab Holdings Ltd.

Notifying Party:

Grab Rentals Pte. Ltd. and Trans-cab Holdings Ltd.

Notifying Date:

 21 July 2023

Summary of transaction:

(i) the names of the merger parties;

(a) Grab Rentals Pte. Ltd. (“GrabRentals”); and

(b) Trans-cab Holdings Ltd. (“Trans-cab”),

(collectively, the “Parties”).

(ii) a description of the transaction;

The notification relates to the proposed acquisition by GrabRentals of 100 per cent of the shares in Trans-cab (the “Proposed Acquisition”)

(iii) a description of the business activities of the merger parties worldwide and in Singapore;

Grab Group

GrabRentals is a wholly-owned subsidiary of Grab Holdings Limited ("Grab”). The Grab group of companies ("Grab Group”) operates primarily over a mobile application across the delivery, mobility and digital financial services sectors. The Grab Group enables users to access driver and merchant- partners to order food or groceries, send packages, hail a ride or taxi, pay for online purchases or access services such as lending, insurance, wealth management and telemedicine.

Trans-cab

Trans-cab is centrally focused as a private taxi operator in Singapore. Its business also includes other services such as towing, credit finance, car leasing and advertising.

(iv) a description of the overlapping goods or services, including brand names;

There is a limited overlap between the Parties in the following services in Singapore:

Rental of private-hire cars for ride-hailing services in Singapore:

GrabRentals operates a fleet of private-hire cars for rental to drivers for the provision of ride-hailing transport services to end-consumers while Trans-cab operates a fleet of taxis and private-hire cars for rental to drivers for the provision of ride-hailing and street-hailing transport services to end-consumers.

The limited overlap between the Parties in the rental space is only in the rental of private-hire cars for ride-hailing services (which does not extend to street-hailing services).

Provision of two-sided platforms matching drivers and riders for the provision of booked chauffeured point-to-point transport (“CPPT”) services in Singapore (“Platform Services for CPPT in Singapore”):

Grab and Trans-cab overlap in the provision of Platform Services for CPPT in Singapore. GrabTaxi Holdings Pte. Ltd. (a wholly-owned subsidiary of Grab) provides a platform, through the Grab mobile application, that matches drivers (of both taxis and private-hire cars) and riders for CPPT services in Singapore. Trans-cab, on the other hand, offers phone taxi booking services to riders but only for the taxi fleet operated by Trans-cab.

(v) a description of substitute goods or services;

The Parties submit that the closest substitutes for the rental of private-hire cars for ride-hailing services in Singapore would be cars from other car rental companies in Singapore.

The closest substitutes for Platform Services for CPPT in Singapore would be such services offered by other ride-hailing or taxi booking platforms in Singapore.

(vi) The Parties’ views on:

a. definition of the relevant market(s);

The Parties are of the view that the relevant markets are:

(a) the rental of private-hire cars for ride-hailing services in Singapore (“Rental Market”); and

(b) the provision of two-sided platforms matching drivers and riders for the provision of booked CPPT services in Singapore (“Platform Market”),

(collectively, the “Relevant Markets”).

For the avoidance of doubt, Platform Services for CPPT in Singapore refer to the same services provided in the Platform Market as defined in paragraph (vi)(a)(b).

b. the way in which competition functions in this market;

The Parties submit that the Relevant Markets are highly fragmented and competitive, where customers can choose from a wide range of alternative solutions to satisfy demand depending on their requirements.

Rental Market

Rental companies compete on rental costs and vehicle quality and availability of vehicle models to service different customer segments.

Platform Market

Platforms compete for drivers based on (i) availability of work; (ii) company culture and values; (iii) technology and tools; and (iv) support and benefits.

With respect to riders, platforms compete on (i) pricing; (ii) fleet size and availability; (iii) service quality; (iv) technology and innovation; and (v) brand image and reputation.

There are no costs for drivers and riders to switch between ride-hailing platforms. Drivers and riders currently multi-home across different platforms and would not hesitate to switch in response to better prices, better quality of service, greater availability of rides, or higher incentives.

c. barriers to entry and countervailing buyer power; and

Rental Market

The expansion of competitors in the Rental Market demonstrates that it is possible for competitors to expand their offerings in the Rental Market.

Platform Market

There are no material barriers to entry or expansion into the Platform Market as it is not prohibitive to acquire or invest in research and development to develop the requisite know-how.

Furthermore, competitors can, and do, pursue asset-light business models that allow them to concentrate on creating a technology platform without having to own a fleet.

d. the competitive effects of the merger (non-coordinated, coordinated and/or vertical effects, as relevant).

Non-coordinated effects

The overlaps between the Parties are minimal.

GrabRentals operates a fleet of private-hire cars for rental to drivers for the provision of ride-hailing transport services to end-consumers (i.e. riders) in Singapore, but it does not operate a taxi fleet. On the other hand, Trans-cab primarily operates a fleet of taxis with a limited supply of private-hire cars for rental to drivers.

With respect to the Platform Market, Grab provides a platform, through the Grab mobile application, that matches drivers (of both taxis and private-hire cars) and riders for CPPT services in Singapore. Trans-cab, on the other hand, offers phone taxi booking services to riders but only for the taxi fleet operated by Trans-cab.

The Proposed Acquisition would not give rise to any non-coordinated effects in the Rental Market. This is due to the multitude of strong competitors, the fact that the market is highly fragmented and competitive, drivers are well-informed of the various rental companies that are available, the ease of switching by drivers, and the fact that there are no prohibitive barriers to entry.

With respect to the Platform Market, Grab will continue to be constrained by the strong competition posed by other technology companies and taxi operators. Riders are well informed and multi-home. Similarly, drivers exhibit a high level of price sensitivity and are inclined to switch to rival operators when presented with more favourable fee structures, rates, or incentives. There are also no prohibitive barriers to entry.

Coordinated effects

The Parties submit that coordinated effects would not arise as there remains numerous competitors in the Relevant Markets following the Proposed Acquisition. The ease of switching by riders and drivers, together with the transparency of fee structures, further creates strong commercial incentives for suppliers to continue pricing competitively and undermines the stability of any coordination.

Vertical effects

The Parties submit that there are no vertical relationships between GrabRentals and Trans-cab. Trans-cab’s workshop currently only serves its own taxis and private-hire cars fleet. Even if GrabRentals fully relies on Trans-cab’s workshop following the Proposed Acquisition, third party workshops would still be able to service other rental fleets in Singapore, and private cars more generally.

With respect to the Platform Market, under Land Transport Authority’s Point-to-Point regulatory framework, drivers are free, prior to, and following, the Proposed Acquisition, to use Grab or any other platforms to offer rides in the Platform Market.

 Status:

Following the issuance by the Competition and Consumer Commission of Singapore (“CCCS”) on 11 July 2024 of its provisional decision regarding the proposed acquisition by Grab Holdings Limited through GrabRentals Pte. Ltd. of Trans-cab Holdings Ltd. (collectively, the “Parties”) (the “Proposed Acquisition”), the Parties have, on 22 July 2024, notified CCCS that they will no longer be proceeding with the Proposed Acquisition.

With the termination of the Proposed Acquisition, the Parties have withdrawn their application to CCCS for a decision, and CCCS has accordingly ended its assessment of the Proposed Acquisition. 

For more details, please refer to the media release dated 25 July 2024.

CCCS has issued a Statement of Decision (Provisional), a step towards finding that the proposed acquisition by Grab Holdings Limited through GrabRentals Pte. Ltd. of Trans-cab Holdings Ltd. is likely to result in a substantial lessening of competition in the market for the supply of ride-hail platform services to drivers and passengers in Singapore; thereby infringing section 54 of the Competition Act 2004.

For more details, please refer to the media release dated 11 July 2024.