SINGAPORE — Grab Holdings Limited (NASDAQ: GRAB), Southeast Asia’s leading super app, and Trans-cab Holdings Ltd (“Trans-cab”), one of Singapore’s esteemed taxi operators, have announced a pivotal agreement on Thursday (20 Jul).
According to a statement issued by Grab, Grab Rentals Pte. Ltd., a subsidiary of Grab, will be acquiring 100% of the shares in Trans-cab, propelling the company’s growth and bolstering its driver base.
The acquisition encompasses Trans-cab’s taxi and car rental business, maintenance workshop, and fuel pump operations.
The Straits Times reported that the purchase, for an undisclosed amount but understood to be around $100 million, started negotiations only two months ago.
The transaction is slated to be completed this week; however, the deal will have to be approved by the authorities.
If finalized, Trans-Cab will mark the first Singaporean taxi company to be acquired by United States-listed Grab, following Grab’s years-long pursuit of purchasing a cab operator.
Trans-cab, established in 2003, has carved a reputable niche in Singapore’s transportation landscape, operating a combined fleet of over 2,500 taxis and private-hire-vehicles (PHVs).
The acquisition comes as consumer behaviors have evolved, urging the need for digitization to ensure taxi drivers remain competitive in the evolving market.
Jasmine Tan, General Manager of Trans-cab, expressed confidence in the deal, stating, “We are certain this agreement protects the future of our taxi drivers. Grab’s industry-leading technology will empower our drivers to serve passengers more efficiently and safely, aligning perfectly with our commitment to safeguarding our driver-partners’ livelihoods.”
The founder of Trans-cab hailed the partnership with Grab
Mr. Teo Kiang Ang, Founder and Chairman of Trans-cab, hailed the partnership with Grab as a strategic match with mutually beneficial outcomes for all parties involved.
“With Grab, we have found the right partner to hand over Trans-cab to, who will prioritize the best interests of our drivers and the business,” Mr. Teo said.
Yee Wee Tang, Managing Director of Grab Singapore, expressed admiration for Mr. Teo’s inspiring journey of building multiple successful businesses from humble beginnings, and conveyed pride in continuing a part of his legacy.
“Trans-cab is a very well-run taxi company and there is a lot that we can learn from Mr. Teo and the Trans-cab team. We look forward to welcoming the Trans-cab fleet and team into ours.”
“We see this as a strategic match with win-win-win outcomes for all. By boosting the number of drivers on our platform and helping them to operate more efficiently, we improve how quickly and reliably we find a ride for our passengers, whenever they need one,” he added.
Enhanced Grab technology to elevate the driving experience for Trans-cab drivers
Grab plans to launch an enhanced Grab Driver application that will be integrated with the Mobile Display Units in Trans-cab taxis.
The app will enable Trans-cab taxi drivers to manage their earnings and receive bookings from the Grab platform as well as Trans-cab’s existing call centre, all through a single platform.
Grab’s allocation technology is expected to further maximize productivity by intelligently assigning bookings to drivers, ultimately helping them earn more.
Grab has ambitious plans to combine software with vehicle hardware to revolutionize the driving experience. One such idea is to place large displays in-vehicle, enabling drivers to manage all jobs, including street hail, through one interface.
Moreover, the tech-savvy enhancements will streamline the taxi-sharing experience, replacing the current manual process with an automated system.
Trans-cab drivers to benefit from Grab’s driver support programs
Trans-cab drivers joining the Grab platform will also benefit from Grab’s driver support programs, including free coverage through Grab’s Personal Accident Insurance while online, access to GrabAcademy for skill development, and participation in Grab’s loyalty programs.
The acquisition comes at a time when Singapore is grappling with a driver supply crunch due to the pandemic, leading to higher fares during peak hours.
By expanding its driver base through the acquisition of Trans-cab, Grab aims to provide passengers with more reliable allocation, addressing the current demand and supply imbalance.
Additionally, GrabRentals, Grab’s private-hire car rental arm, is poised to reap operational efficiencies and cost savings by leveraging Trans-cab’s expertise in fleet support through its maintenance workshop.
“A larger fleet size will also allow GrabRentals to derive savings from scale in areas like auto insurance premiums and procurement of parts. ”
Grab’s attempt to acquire Singapore taxi firm
In 2017, Grab engaged in discussions to acquire SMRT’s fleet, but the deal ultimately fell through.
Then, in 2022, talks commenced with Prime Taxi, the smallest cab operator in Singapore, but the deal did not materialize due to what sources referred to as “insufficient offers.”
Trans-Cab made its entry into the taxi market two decades ago, taking advantage of the Government’s industry liberalization efforts aimed at fostering competition.
Over the span of ten years, it rapidly ascended to become the second-largest taxi firm in Singapore, surpassing SMRT Taxis, which is under the ownership of the rail operator.
SMRT Taxis, now rebranded as Strides, made a significant move by acquiring Premier Taxis, with their combined fleet, consisting of approximately 2,500 vehicles, surpassing that of Trans-Cab in April 2023.
ComfortDelGro, with its fleet of around 8,800 taxis, retains its position as Singapore’s largest taxi operator, accounting for just over 60% of the market.