International Asia Malaysia starts anti-monopoly probe against Grab a year after Uber take over

Malaysia starts anti-monopoly probe against Grab a year after Uber take over

As the government pushes for greater competition in the economy and new ride-hailing services emerge, it is looking into accusations of monopolistic practices by Grab

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Singapore-based ride-hailing service Grab is facing an anti-monopoly investigation in Malaysia, a year after it said it will cooperate with authorities on a probe.

In July 2018, the authorities said it will conduct a detailed monopoly risk study in Malaysia but it appears the probe is now revived after the government of Prime Minister Tun Dr Mahathir Mohamad decided to look into monopolies in the ride-hailing segment.

Bloomberg said on Sept 25 the local authorities are pushing for broader competition in the segment. The Mahathir government has given its green light for Gojek to bring its motorcycle ride-hailing services to Malaysia.

The government was then faced with a backlash from a local motorbike ride-hailing business and from some religious figures as well as a taxi operator over its approval of Gojek.

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A homegrown motorcycle taxi service, Dego Ride, which was suspended by the authorities during ex-PM Najib Razak’s term in power, made itself known to the authorities, which seemingly forgot about them in their approval of Gojek.

Dego now says it is ready to compete with Gojek and Grab (which is also looking into motorcycle ride-hailing in Malaysia).

The investigation into Grab follows complaints the company has monopolised the business after it bought Uber’s Southeast Asia operations.

There are several ride-hailing or e-hailing transportation services in Malaysia, including Mula, MyCar, JomRides, Dacsee and EzCab.

In March 2018, Uber sold its business in Southeast Asia to local rival Grab which took its ride-hailing business in eight countries. It also grabbed Uber Eats, which was then present in three countries.

Uber is considered the pioneer in ride-hailing in Malaysia but it could not compete with Grab in the country.

Now that the government is pushing for greater competition to its economy, it is looking into an accusation of monopolistic practices by Grab.

Bloomberg reports that Malaysia Competition Commission chief executive officer Iskandar Ismail said last Thursday the anti-monopoly watchdog was stepping up the probe into the ride-hailing start-up, which was first announced last year by the country’s transport ministry.

According to Bloomberg, representatives for Grab did not respond to an emailed request for comment.

While last year the probe was based on allegations the merger could have broken competition laws, which is similar to claims made in Singapore at that time, there is no indication as to what specific steps the Malaysian probe is taking.

Bloomberg says Gojek’s top management met with the Malaysian Prime Minister in Kuala Lumpur in August.

It also links the probe and the need for competition in the segment to Mahathir’s struggle to lower the cost of living for Malaysians, a key pledge that led to his return to power in 2018.

According to the international business portal, the government in Malaysia is trying to expose state-linked companies to competition and introduce open tenders, ordering Telekom Malaysia to share its high-speed broadband cable network with other operators. -/TISG

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