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REFILE-UPDATE 1-As Uber bows out to Grab, drivers and riders bemoan loss of choice

From Reuters - March 26, 2018

SINGAPORE (Reuters) - A mix of concern and disappointment met Uber Technologies Incs [UBER.UL] deal to sell its Southeast Asian business to bigger regional rival Grab, as drivers and users of the ride-hailing firms took in the prospect of sharply reduced competition.

The services throughout Asia have long relied on discounts and promotions for consumers and incentives for drivers, which made for tough competition, pushing down profit margins.

Grab said the Uber acquisition accelerated its path to profitability in its core transport business, as it would become the most cost-efficient Southeast Asian platform.

While drivers were split on which of the two services offered better compensation, they generally expected fares to go up with the reduced competition.

Rennu Mahajan, who has driven a combined three-and-a-half years for both companies in Singapore, said some of her driver friends were concerned because now they would not be able to switch to the other app.

But I am personally not worried. I am quite confident that the fares will go up. If incentives dont go up, fares will increase and we will still get a little bit more, said Mahajan, 57.

On its Singapore website, Grab said passengers could expect better service with more drivers and transport options available on one app and that fares would not change. For drivers, it said the benefits and incentives structure remained the same.

However, following a similar merger between Grab investor Didi Chuxing and Chinas Uber business in 2016, driver numbers dropped dramatically as subsidies lapsed and new regulations raised residence requirements for drivers.

In the year following Didi Chuxings acquisition, driver response rates fell between 15 and 40 percent in major Chinese cities, according to Didi Chuxings data.

According to mobile data analytics firm App Annie, Grab was ranked fifth among top apps based on monthly active users in Singapore in 2017 versus Uber at No. 7. In Indonesia, Go-Jek was at No. 9 just ahead of Grab.

REGULATORY CONCERN

Whether the merger would eliminate competition in Singapore will be the focus of government review, a spokeswoman for the Land Transport Authority said.

We will ensure that no one single market player dominates the sector to the detriment of commuters and drivers, she said.

Malaysias Land Transport Authority issued a similar statement, saying it will work closely with relevant consumer and various regulatory agencies such as the Malaysia Competition Commission to safeguard passengers from unfair terms.

DISCOUNTS AND PROMOTIONS

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