July 21, 2023
SINGAPORE – Ride-hailing giant Grab is acquiring Trans-Cab, Singapore’s third-largest taxi operator.
The purchase – for an undisclosed amount but understood to be more than $100 million – includes some 2,200 taxis and more than 300 private-hire vehicles which Trans-Cab owns. It also includes Trans-Cab’s vehicle workshop and fuel pump operations.
The acquisition is being done through Grab Rentals, the private-hire arm of Grab. It is unknown if the company, which started out as MyTeksi in Malaysia in 2012, would have to declare its acquisition price to the United States Securities and Exchange Commission.
Trans-Cab founder and chairman Teo Kiang Ang told The Straits Times that negotiations started only two months ago, and that the deal will have to be approved by the authorities.
Mr Teo said: “It has been a 20-year journey, and many of our drivers have journeyed with me from day one. I am really reluctant to sell, but considering that the buyer has good technology and a strong platform, drivers can get more jobs and earn more income.”
Mr Teo, whose other core business is the bottling and supplying of cooking gas, said he will use the proceeds of the sale to “explore other business opportunities”.
In a joint statement following an earlier report by The Straits Times, the two companies said they expect the deal to be completed in the fourth quarter if regulatory permission is granted. It would make Trans-Cab the first Singapore taxi company to be acquired by US-listed Grab, which has been trying to buy a cab operator for several years now.
In 2017, Grab was in talks to buy SMRT’s fleet, but the deal fell through. In 2022, it started talks with Prime Taxi, the smallest cab operator here, but the deal did not proceed. In both cases, sources said the offers were “too small”.
Trans-Cab entered the taxi market 20 years ago when the Government liberalised the industry to increase competition. Within 10 years, it grew to become the second-largest taxi firm here, overtaking SMRT Taxis, which is owned by the rail operator.
But earlier in 2023, SMRT Taxis – which has since been rebranded as Strides – bought Premier Taxis, and their combined fleet of about 2,500 vehicles now exceed Trans-Cab’s. ComfortDelGro remains Singapore’s largest taxi operator with around 8,800 taxis, or just over 60 per cent of the market.
Grab said it plans to launch an app which will be integrated with the mobile display units in Trans-Cab taxis. The app will enable cabbies “to manage their earnings and receive bookings from the Grab platform as well as Trans-Cab’s existing call centre”.
Grab added that it is exploring placing a large display in the vehicles so that “drivers can manage all jobs, including street-hail, through one interface, with additional features like navigation”.
The ride-hailing firm, which is in other businesses such as food delivery, finance, insurance and payments, has been incurring losses since it was started in 2012. But an insider recently claimed that its private-hire vehicle business was profitable.
In June, Grab retrenched more than 1,000 employees, its highest number of layoffs. The figure represents 11 per cent of its workforce, and follows a 2020 round that affected some 5 per cent of staff.
Grab’s co-founder, Ms Tan Hooi Ling, will also step down by year-end. The company’s stock last traded at US$3.51, down from a high of more than US$16 in late 2021.
According to latest available statements posted by the Accounting and Corporate Regulatory Authority, Trans-Cab Holdings had a total equity of $62.7 million as at end-2020. In 2021, it reported a net profit of around $8.7 million and revenue of $81.1 million. It had cash and equivalents of $7.6 million as at end-2021.
Observers said Trans-Cab’s exit marks another blow to the taxi industry, which has been buckling since private-hire operators were allowed to enter the point-to-point transport sector in 2013. But National Taxi Association adviser Yeo Wan Ling cheered the move, calling it “a significant development in the point-to-point transport Industry”.
“With more ride options and the adoption of innovative technology, Trans-Cab drivers will remain competitive and see improvements to their livelihoods with this acquisition,” she added.
Trans-Cab cabby Francis Goh was more ambivalent. “I’ve never driven using the Grab or Gojek apps. I prefer to drive as a taxi driver. Now that the company is sold, I’ll go along, but don’t expect me to start using these apps.”
Mr Goh, 68, said that since the arrival of ride-hailing apps, drivers “pick and choose which offers the higher fare – the metered fare or the one with surge pricing”. “You can’t blame drivers for acting this way, but I personally don’t think it is right, so I don’t join them,” he added.