The $13 million fine is "not a small sum" and could help deter irreversible mergers which will harm the market, said experts
Experts want more clearly defined rules but welcome CCCS move Grab was fined about $6.4 million while Uber was fined about $6.58 million by the Competition and Consumer Commission of Singapore. ST PHOTO: KELVIN CHNG

Observers have welcomed the Competition and Consumer Commission of Singapore's (CCCS) decision on the Grab-Uber deal but said regulations on the sector need to be more clearly defined.

The $13 million fine is "not a small sum" and could help deter irreversible mergers which will harm the market, said TSMP Law Corporation head of mergers and acquisitions Stefanie Yuen-Thio.

National Private-Hire Vehicles Association executive adviser Ang Hin Kee said the measures imposed by CCCS would help encourage competition by showing that incumbents are also subject to regulation.

However, Mr Dane Anderson, Asia-Pacific vice-president at research firm Forrester, said Grab's "miscues" in customer and driver experience - such as the rolling back of incentives - have already helped open the door for competitors.

Singapore University of Social Sciences transport economist Walter Theseira said the decision to prevent the private-hire car fleet of Lion City Rentals from being acquired by Grab could help competition, as tapping an existing fleet is cheaper than building one from scratch. However, the smaller firms that emerged following Uber's exit - such as Kardi and Tada - are unlikely to get a leg up as a result of the CCCS ruling, he added.

"Rather, the decision opens the door for a well-funded competitor to enter the market at substantially less risk and cost than previously," said Dr Theseira.

National University of Singapore (NUS) transport lecturer Lee Der-Horng contended that while the decision seemed to impose tough penalties on the ride-hailing sector, the industry still requires a stricter regulatory regime. He noted that private-hire cars are still not subject to the "rigorous regulation" imposed on taxis. "The CCCS must focus more upon a regulatory approach rather than laissez-faire followed by penalty, as this is a no-win situation for everybody," he said.

Dr Lee also questioned why the removal of exclusivity clauses was not imposed on other firms, such as ComfortDelGro, whose taxi drivers are not permitted to drive for Grab's JustGrab platform.

"I do agree that exclusivity clauses are not good, but they can't be stopped selectively," said Dr Nitin Pangarkar of NUS Business School.

Drivers, however, are sceptical the CCCS decision will change their fortunes. Private-hire car driver Kurniawan Raymond Massie said incentives started drying up after Uber exited and that this badly affected the income of drivers.

"Even with the fine, nothing will change," said the 37-year-old, who intends to leave the industry soon.