It’s been the worst kept secret, but on Monday it was announced that Grab had finally acquired their rivals Uber Singapore. It’s been a tough back and forth battle between the two ride-hailing giants, but with Uber looking to IPO next year, they definitely weren’t keen on waging a long-term war.
The biggest worry is that Grab’s win over Uber Singapore has more than one loser. Now that they’re THE ride-hailing app for Singaporeans, are we losers too? We consider 5 consequences of the acquisition.
1. Fares are going to get more expensive – WE LOSE
Grab is smart, so they won’t start raising fares immediately. But now that they’re essentially a monopoly (which is why the Competition Commission of Singapore is now looking into the acquisition deal), you can be sure that raised fares are inevitable.
Now that there’s no longer a bitter price war between Uber and Grab, expect to never see those fare discount offers from Grab again. The last time I saw an email from Grab giving fare discounts (without any strings attached) was in November 2017. Since then, the discounts have been promoting the use of GrabPay, which is something we’ll go into later.
But to be honest, raising fares isn’t the worst possible outcome of Grab’s acquisition of Uber. It’s the fact that Grab’s awkward cancellation policies are now the norm, which begs the question of whether they’ll change.
2. Grab’s cancellation policies probably won’t change too much – WE LOSE
Whenever there is a system, you can expect to have people finding loopholes and exploiting them. The same is true of Grab, whose cancellation policies strive to protect both passenger and driver, but in the end pleasing neither.
As recently as 2 weeks ago, local Youtube star Elizabeth Boon was stuck in a 20-hour deadlock with her Grab driver, as neither wanted to cancel the trip.
In this particular situation, the driver chose not to pick up the passenger, or respond to her attempts to contact him. It’s been speculated that the driver wanted to earn his incentive and would have forfeited it if he cancelled.
This is because Grab’s Driver Cancellation Rate is a percentage of the number of cancelled trips over the number of accepted trips. In general, cancelling more than one trip for every 10 trips accepted (i.e. more than 10%) will cause them to lose their incentive.
But ever since Grab reduced the number times a passenger has been allowed to cancel a Grab ride without penalty from 9 to 2 per week, passengers are now practically at the mercy of drivers, since you cannot book another trip without cancelling the current one.
This means that if a Grab driver is 8-10 minutes away and accepts your ride request, you’ll have to wait. And if the Grab driver cancels after 8 minutes, you’ll have waited 8 minutes for nothing. Don’t just take it from me! Even Kim Huat says so.
But the truth is, I understand why these policies exist. Grab wants to please both their driver-partners and passengers. And they have to make it difficult for people on both sides to chut pattern. But surely there’s a way to do it without pitting driver against passenger?
3. GrabPay is more likely to take over as THE mobile wallet in Singapore and the region – WE… WIN?
The acquisition of Uber brings with it the acquisition of UberEATS and opens the door for Grab’s food delivery service GrabFood to enter our shores. Finally, there’s an actual reason to buy GrabPay Credits.
Yes, I know that there are many merchants already on the GrabPay platform and I’m sure there’ll be many more along the way, but it’s not like I top up GrabPay Credits regularly. I don’t even take Grab rides often enough to warrant sinking money into the app.
But having a food delivery service is quite the game-changer, because now you don’t even need to order from a merchant that accepts GrabPay Credits. You just order it through the app, and Grab now has instant access to all of UberEATS’ partners – which is quite substantial.
What’s more, since you can technically buy GrabPay Credits with a credit card, you now have even more of a reason to maximise your cashback/rewards/air miles accrual each month.
4. LiveUp loses a main partner – WE… WILL HAVE TO WAIT AND SEE
LiveUp is a loyalty programme anchored by Redmart and Lazada, but Uber and UberEATS were a huge factor in justifying the $28.80 annual subscription fee. Now that Uber in Singapore will cease to exist in slightly over a week, LiveUp is going to be lacking a major partner.
Of course, with Grab Rewards already quite the established loyalty programme, we don’t foresee Grab replacing Uber on LiveUp. In fact, it would seem like Grab isn’t keen on sharing the spotlight with anyone, so a programme like LiveUp would not be up their alley.
Yes, the loss of Uber VIP access and free UberEATS delivery does cause LiveUp to lose some of its shine, but the truth is all LiveUp needs to do is find a new main lifestyle partner, and I’m sure they’ll have a new one soon. And hopefully whichever partner they bring on will mean only good things for us commuters.
5. What about all the other partnerships that Uber has been making over the past few years? – WE (hopefully) WIN?
ComfortDelGro finds itself back to square one after this acquisition means that all the groundwork they’ve been preparing for their partnership with Uber has gone down the drain. This includes the relatively new UberFLASH option, which would’ve increased rides for taxi drivers.
Hot on the heels of news that Comfort is telling its drivers to delete the Uber app, it seems like the potential acquisition of Uber’s rental car fleet, Lion City Rentals is now in limbo. Drivers who have contracts with Lion City Rentals can now accept Grab bookings for the duration of their contract.
While all these seem like bad news, the fact remains that ComfortDelGro is now in a prime position to fill the void left by Uber. Should Grab one day allow fares to get too expensive, we may one day return to flagging taxis along the road.
But perhaps instead of waiting for Grab’s fares to increase, ComfortDelGro may want to consider taking advantage of the hard-to-break Singaporean habit of booking their transport online. Maybe it’s time to consider absorbing the booking fee when using the mobile app, for example?
If that happens, then we’ll definitely not be the losers.
What are your thoughts on Grab’s acquisition of Uber? Share them with us.