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Could Grab and Uber be forced to unwind their merger? Unlikely, experts say

Courtesy Channel New Asia

"Singapore's competition watchdog has suggested that the recent merger between ride-hailing companies Grab and Uber could be undone after investigations revealed that the deal has infringed the Competition Act.

The Competition and Consumer Commission of Singapore (CCCS) said the deal led to a 'substantial lessening of competition' in ride-hailing platforms, made it harder for new competitors to enter the market, and resulted in higher prices.

It will also be seeking public feedback on proposed remedies to address competition concerns, and has recommended imposing financial penalties on the parties. It also floated the possibility that the merger could be undone unless the proposed measures do enough to address competition concerns.

However, experts Channel NewsAsia spoke to said that it was not realistic for the deal to be unwound given Uber's exit from the Singapore market and the nature of the ride-hailing business.

Dr Walter Theseira, transport economist at the Singapore University of Social Sciences, said that unwinding the merger was 'practically impossible' because the ride-hailing business does not constitute only physical assets.

'It’s a practical issue. When you look at how mergers unwind in the past, it involves physical assets that can be distributed - assets go back to (company) A or B. But what about drivers and passengers? You can't identify which driver or passenger used to belong to Grab or Uber,' explained Dr Theseira.

Read more here.

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