By: Obbana Rajah
In light of recent events, everyone who relied on personal transport companies Uber and Grab would now be rather worried following the ‘merger’ of the two. The former company is handing over all of its South-east Asia operations in eight countries; Cambodia, Indonesia, Malaysia, Myanmar, the Philippines, Singapore, Thailand and Vietnam. Grab will also be taking over Uber’s food delivery business, Uber Eats.
However, as sugar-coated and amicable a ‘merger’ might be all is not as rosy as it seems under the hood of Uber.
In August of 2016, UberChina opted to combine with China’s dominant ride-hailing company, Didi Chuxing Technology Co. It has also been known that its Uber’s former CEO, Travis Kalanick had to resign in 2017 following many scandals related to the company. They even include sex scandals, links to Donald Trump resulting in a decline in its popularity and just poor management.
Following all of this bad rep, it then comes as no surprise that Uber would be in the market looking to sell and cut its losses. It also comes across as more acquisition and less merger where home-grown Grab is there to pull Uber out of the proverbial weeds. It is also very much expected of Uber to want to cut its losses. It is very prudent for Uber where as part of Grab’s acquisition, they will take a 27.5 per cent stake in Grab.
Riders of both apps have exercised their unhappiness and worry as to whether the monopoly that is now Grab will affect pricing. There is hope though, with foreign ride-hailing companies looking to enter the local market.
However, in his article on the possibility of monopolistic prices, NUS Business School’s Nitin Pangarkar disagrees, saying that, “In their zeal to acquire a larger piece of the business, the companies were probably doing unsustainable levels of discounting and subsidising. With or without the merger, the discounting was bound to stop at some point in time, probably as early as next year”.
Netizen Jeremy Chen took to Facebook to express his unhappiness on the whole situation, “Can you get a company that is shutting down business in SEA to set up again? It’s not a merger, it’s a pull out. And if the PAP invalidates the arrangement and hence the consideration given by Grab to Uber, it would shake investor confidence massively”.
Many also used the opportunity that presented itself as Grab’s Facebook announcement of its takeover of Uber to unleash the complaints and comparisons between the two apps.
One of the top comments from Joel Lim read, “I don’t mind grab but can you remove the function to let your drivers see the end location until they accept? Else sometime they just refuse to pick up any rides. It’s sad”.
Netizen Maria Kolomenska also added, “Terrible news, not exciting at any point. Cannot imagine how to use grab for everyday commute, as it always takes 20+ minutes to book your grab in the morning. For the Uber just book and get a driver in a minute. Surge pricing is also not reasonable. The app is not user-friendly at all”.
With regards to convincing the loyal patrons of the former sinking ship that was Uber, Grab does have its work cut out.