But news reports that Uber is on the verge of selling its Southeast Asia operations to its biggest rival Grab, has the digital manager from Malaysia concerned that consumers might ultimately be at the losing end.
Ilsa isn’t alone in worrying about how the lack of competition to Grab could affect consumers.
Malaysia Consumers Movement (MCM) president Darshan Singh Dhillon told FMT that if Grab does takeover Uber’s operations in the region, it will monopolise the ride-sharing market in Malaysia.
“If that happens, the relatively cheap service that Malaysians have been enjoying could become expensive, especially if our conventional taxi services are wiped out,” Darshan said.
This is more so, with thousands of taxi drivers having reportedly given up their taxis for Uber and Grab in the past few years, citing their inability to compete with the lower fares offered and fewer regulatory requirements.
Darshan said MCM wants the government to encourage more ride-sharing companies to participate in the industry through incentives or removal of unnecessary regulatory barriers.
“The government can also support traditional taxi companies and drivers by teaching them to adapt to the changing times and to leverage on technological advancements to improve the service they provide.”
He also questioned if the reported takeover has been approved by the Malaysian Competition Commission (MyCC). However, it is not clear if any regulatory body in the country can stop a move by companies with its regional headquarters in Singapore.
Incentives
For a Uber driver who only wanted to be known as Peter, the possible takeover is bad news, especially since he has been banned from being a driver partner by Grab.
“Most of the drivers I know actually switch between driving for Uber and Grab, depending on the incentives they get. So if there is only one company, then drivers will have to take whatever incentives are put on the table.”
But should Uber exit the Southeast Asian market, Grab which has more than 2.1 million drivers in Singapore, Indonesia, the Philippines, Malaysia, Thailand, Vietnam, Myanmar, and Cambodia, would still face competition says Institute of Strategic and International Studies (ISIS) economist Firdaos Rosli.
“Already we have many taxi-hailing apps in the market, but where these apps can make the jump to become ride-sharing apps is another question.
“If they want to, they have to offer a lot, if not more than what Grab offers to its users.”
Firdaos, who is ISIS’ economics, trade and regional integration director, said that if the takeover materialised, then Grab will be the benchmark for all taxi services, be it traditional taxis or ride-sharing services.
“They will be subject to high public scrutiny as well.”
Bloomberg reported earlier that Uber is selling parts of its Southeast Asia operations to Grab in exchange for a stake in the company.
The ride-sharing market in Southeast Asia is rapidly expanding and is expected to reach US$13.1 billion (RM15.2 billion) by 2025.