Competition watchdog clears Grab-Uber deal but...
MANILA, Philippines — The Philippine Competition Commission on Friday announced it has cleared ride-hailing firm Grab’s acquisition of rival Uber in the country but subject to certain conditions to address anti-competitive concerns.
Early this year, the two companies announced that Grab would buy Uber’s ride-sharing and food delivery business in Southeast Asia, the industry's biggest acquisition in the region.
Under the agreement, Uber, which invested $700 million in Southeast Asia, will get a 27.5-percent stake in the combined company and Uber CEO Khosrowshahi will join Grab's board.
The PCC had ordered Uber and Grab to delay the integration of their businesses and continue their separate operations while the antitrust agency examines the domestic implications of the merger.
“We rendered a commitment decision today. The commitment decision contains the commitments of Grab. The commitments herein are no ordinary pledges,” PCC Chairman Arsenio Balisacan said.
The competition watchdog has set these conditions for Grab, which will be monitored for a minimum period of six month:
- Bring back market averages for acceptance and cancelation rates and response time of drivers before the Grab-Uber transaction.
- Revise Grab’s receipt to show the fare breakdown per trip, including distance, fare surges, discounts, promo reductions and per-minute waiting charge if reinstated by transport regulators.
- Prohibition from imposing prices that have “extraordinary deviation” from the minimum allowed fare. Should Grab violate this commitment, it will be slapped with a penalty equivalent to 5 percent of its commission, provided that it will not exceed P2 million.
- Remove destination masking for drivers.
- Prohibition from introducing policies that will result in drivers and operators being exclusive to Grab.
- Monitor Grab’s driver incentives that may affect competitors’ conditions and ability to expand.
“Any breach of the conditions will subject Grab to fines of up to P2 million per breach or even the unwinding of the transaction,” Balisacan said. “The PCC binds Grab to these conditions in order to clear the Uber acquisition.” — Ian Nicolas Cigaral
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