Entry of new players in the ride-hailing market saw average commuter fares falling by 11 per cent, while 55 per cent of drivers say their earnings increased.
Singapore, 2 October 2019 – A study of Singapore’s ride-hailing market has underscored the importance of healthy competition in the market following the Grab-Uber merger in 2018. It found that since the entry of new players into the market, average daily ride-hailing fares have fallen by 11 per cent for commuters, while 55 per cent of drivers reported increased earnings (35 per cent of whom saw an increase of more than 10 per cent).
Conducted by the Centre for Governance, Institutions and Organisations (CGIO) at the National University of Singapore (NUS) Business School, the study polled 1,000 drivers and commuters who are users of multiple ride-hailing services present in the market at the time of the study such as Grab, Gojek, RYDE and TADA. CGIO independently collected, coded and analysed the data. The study, which was carried out between July and August 2019, comes nearly a year after the Competition and Consumer Commission of Singapore (CCCS) issued an infringement decision on the Grab-Uber merger. It analyses how the evolution of Singapore’s ride-hailing landscape over the past 12 months, which saw the merger take place, as well as the entry of new players into the market, has affected stakeholders.
Eighty per cent of polled commuters believed the entry of new operators provided them with more options, while 52 per cent of them noted improved availability of ride‐hailing services. The proportion of drivers who are satisfied with incentives offered by ride-hailing providers also more than doubled compared to the post-merger period.
The survey supports the CCCS’ findings that the merger led to a “substantial lessening of competition” to “the detriment of Singapore drivers and riders”, including an increase in effective fares of between 10 per cent and 15 per cent post-merger. According to the study, 63 per cent of commuters polled noted a negative impact on their ride-hailing experience, and 87 per cent of drivers reported a decrease in their earnings after the merger.
In addition, 64 per cent of commuters also said that they had been adversely affected by the downward revision of customer rewards offered by ride-hailing platforms during the post-merger period.
Drivers were found to be particularly hard hit by the merger. Of the 87 per cent of them who indicated a decrease in their earnings, 77 per cent saw their earnings decrease by more than 10 per cent. Furthermore, 40 per cent of drivers on average indicated they were dissatisfied with the incentives during the post-merger period, compared to just 24 per cent before the merger.
“Since ride-hailing was introduced in Singapore in 2013, it has become an integral part of the country’s transport landscape. Our study supports CCCS findings that the Grab-Uber merger monopolised the ride-hailing market to the detriment of stakeholders.
“We are heartened to find that there is healthy competition in the market today as a result of the entry of new players and the responses from commuters and drivers support this,” said Professor Lawrence Loh, Director of CGIO at NUS Business School.
“As Singapore advances towards its 2040 vision of a car-lite, inclusive and even more well-connected transport system, it is imperative that the ride-hailing market – which will remain an integral part of that system – continues to be open, contestable and dynamic. For that to happen, healthy competition is an absolute requisite,” Prof Loh added.
The study was commissioned by Gojek and conducted independently by the Centre for Governance, Institutions and Organisations at NUS Business School.
Please refer to the Annex for key findings.
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About the Centre for Governance, Institutions and Organisations
The Centre for Governance, Institutions and Organisations (CGIO) was established by the National University of Singapore (NUS) Business School in 2010. It aims to spearhead relevant and high-impact research on governance and sustainability issues that are pertinent to Asia, including corporate governance, corporate sustainability, governance of family firms, state-linked companies, business groups, and institutions. CGIO also organises events such as public lectures, industry roundtables, and academic conferences on topics related to governance.
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