You know the taxi industry in Singapore is desperate to switch gears and get out of its rut when cab companies start to ally themselves with Grab and Uber — the very reasons they’re suffering from setbacks. News just broke that our country’s largest taxi operator ComfortDelGro is apparently in talks with Uber to potentially work together and avail its 15,500 cabs on the ride-hailing app.
It could work in ComfortDelGro’s favor, as Uber has more than 15,000 cars in Singapore, with a utilization rate of up to 90 percent. This could also lead to cooperation in fleet management.
According to transport researcher Park Byung Joon from the Singapore University of Social Sciences, “Comfort is the taxi company in Singapore. It has to defend its turf. On the other hand, Uber is losing money… so, instead of going head to head, it looks like they are engaged in a truce.”
Uber’s reputation has also taken quite a beating in recent months too, with combustible Honda Vezels, the resignation of CEO Travis Kalanick and its troubling corporate culture, among other issues.
However, industry watchers said this tie-up could benefit Uber more than ComfortDelGro. In the short term, taxi drivers would probably get a higher number of bookings; but in the long term, Uber would grow in power as more people use its app instead of Comfort’s booking platforms, said research analyst Abhishek Nigam of stockbroking firm Nomura to The Straits Times.
Other local cab companies have already forged similar alliances with Grab, which is Uber’s main competitor.
ComfortDelGro said that it signed an “exclusivity letter” with Uber for discussions to join forces for a “potential strategic alliance”, in a statement it made to the Singapore Exchange yesterday (Aug 22). But it also added that “there is no certainty or assurance that such discussions… will result in any definitive agreement of transaction”.
ComfortDelGro had reportedly attempted to tie-up with British start-up Karhoo previously, but the company unfortunately shuttered its Singapore office last year.
