Uber operations to sell operations to Grab; Indon firm to compete with consolidation in PH


By Macon Araneta | FilAm Star Correspondent

Following Uber’s decision to sell its Philippine operations to rival Grab, Makati City Rep. Luis Campos Jr. now wants Go-Jek, Indonesia’s top technology firm that offers ride-hailing and logistics services, to come in and compete with surviving ride-hailing giant Grab.

“No matter how you look at it, the combination of the regional businesses of Uber and Grab not only reduces but effectively eliminates competition in the Philippine ride-hailing market,” Campos said.

“To counteract the merger and reestablish competition, we may have to encourage other large suppliers such as Go-Jek to come in right away,” said Campos, a deputy minority leader.

With more than 400,000 motor vehicles and drivers, Jakarta-based Go-Jek is the most popular ride-hailing app in the world’s fourth most populous country.

Campos said he would have preferred that the three dominant regional players – Uber, Grab and Go-Jek – were all in the Philippines fiercely competing against each other.

“Three players are better than two. But if we can’t have three, two is better than one,” he said.

All the same, Campos said lawmakers are counting on the Philippine Competition Commission (PCC) to pore over the Uber-Grab unification.

“Assuming the deal qualifies as a covered transaction, then we expect the anti-trust body to perform its duty in ensuring that businesses compete and that consumers benefit,’ Campos said.

On the day the Uber-Grab deal was announced, PCC Chairman Arsenio Balisacan in a statement said: “No notification has been filed at the PCC by Grab or Uber to date. If the parties meet the new threshold, now set at PHP 2 billion for size of transaction and PHP 5 billion for size of party, they should notify the PCC within 30 days after signing their definitive agreement.”

The PCC is mandated by law to prohibit anti-competitive business agreements, abuses of dominant position, as well as mergers and acquisitions that lessen competition.

In ideal markets ruled by formidable anti-trust regulators, Campos said a business combination that gets rid of the competition may not be permitted until a substitute challenger comes in.

He said anti-trust regulators may also compel the unloading party to sell its business to two separate buyers, instead of dealing with a lone acquirer.

San Francisco, California-based Uber disclosed on March 26 that it had agreed to sell its entire Southeast Asian operations to regional contender and Singapore-based Grab for an undisclosed amount, and in return for a 27.5 percent equity stake in Grab.

Grab will take over Uber’s business in the Philippines, Singapore, Malaysia, Thailand, Indonesia, Myanmar, Vietnam and Cambodia, including the food delivery business Uber Eats.

The consolidation means that Grab will be running more than 50,000 cars and drivers in the Philippines.