Ride-hailing app Grab has contacted drivers who rent cars from Lion City Rentals (LCR), urging them to switch across from Uber, whose South-east Asian business it acquired last week.
"This means you will now be eligible for for exclusive Grab incentives," it added. "LCR weekly rental rebates will be continually paid out if applicable."
Grab's move comes at a time when the company is trying to convince the authorities that it is not a monopolistic business, and as Indonesian rival Go-Jek prepares its entry into Singapore - potentially creating a drastic driver shortage.
A Grab spokesperson told The Straits Times on Thursday that 'thousands' of Uber drivers have signed up with Grab, but would not elaborate. She added, "We are reviewing how we will work together with LCR, so this is still up in the air."
The Straits Times understands the company, which is diversifying aggressively into a host of other businesses besides ride-hailing, has submitted proposals to the Competition and Consumer Commission of Singapore (CCCS) on how it intends to meet interim measures set out by the authority.
These include maintaining its pre-acquisition pricing and product options, having a non-exclusive arrangement with drivers, and considering allowing any previously banned driver to rejoin. The Straits Times is awaiting updates from the commission.
"From a technical point of view, it also cannot really stop the merger," Prof Lee said, noting that competition will not be reduced meaningfully as new entrants have entered or are entering the market soon.
Indonesia's Go-Jek for instance, is expected to launch its ride-hailing app here within the next few weeks, although the company has refused to comment. The Land Transport Authority has also refused to comment on Go-Jek's imminent entry.
Even as Grab is corralling drivers from LCR, taxi giant ComfortDelGro is still mulling over what it should do with its proposed purchase of LCR's fleet here. The group said it was reviewing its $642 million deal to acquire a 51 percent stake in LCR when the Grab-Uber deal broke last Monday.
The industry is likely to face a sharp reduction in drivers by the end of June. The LTA has revealed that 34,000 private-hire drivers - two-thirds of the pool - have not yet passed their vocational driving licence. If they do not do so by the end of June, they will not be allowed to operate.
Meanwhile, some licensed drivers are viewing Grab's takeover of Uber's regional business with concern. Mr. Elliot Lin, 33, a property agent who drives part-time for Grab, said, "Those who need to drive full-time, and who are banned for whatever reason, will no longer have a choice. That is, until another provider like Go-Jek comes in."
