Singapore’s biggest taxi operator Comfort DelGro has announced it intends to acquire a majority stake in Lion City Rental (LCR).
LCR is Uber-owned car rental business and has a fleet of 14,000 private-hire cars for rental.
The Straits Times reported that the deal is valued at $642 million, with a cash consideration of $295 million. The deal is subjected to regulatory approval.
What would change
Upon the conclusion of the deal, Lion City Rental will be managed by Comfort Delgro’s fleet management and operations.
CDG Taxi Drivers will also benefit as they will now be able to receive ride request on the Uber Driver App. This potentially creates more earning potential as they will be exposed to more job options.
With the added taxi fleet to the system, Drivers may see a new service similar to JustGrab that could replace the usual UberX bookings.
A silver lining for CDG
Comfort Delgro has taken a beating this year. They were targeted by Grab who introduced massive incentives and never seen before promotions to specifically poach Comfort Delgro Taxi Drivers openly. It was reported that close to 3000 Comfort Delgro taxi drivers had indicated interest to jump ship to Grab during the period. Data from LTA also showed that Comfort Delgro had a huge decline in their fleet.
Good News for the Private-Hire Industry
The acquisition of Lion City Rental is a good move that Private-Hire Drivers should be glad to see.
Grab has been actively raising funds and intends to consolidate its position as the number 1 player in the region by building the largest fleet. They have also launched massive offers to lure taxi drivers to drive for them. The consolidation of power and the fall of a competitor would spell worse times for drivers as they would have no choice but to play by the biggest player’s rules.
The highly potential alliance between Uber and Comfort Delgro is a signal of clear intention to stop Grab in its track to dominate the market.
Source – The Straits Times