Grab, the Ride-Hailing Giant, Makes a $100 Million Acquisition of Singapore's Trans-Cab
Grab Rentals, Grab's private-hire arm, acquires Trans-Cab, including 2,200 taxis and over 300 private-hire vehicles, in a landmark deal. Trans-Cab's founder expresses mixed emotions while industry observers weigh in on the impact.
Ride-hailing giant Grab is set to acquire Trans-Cab, Singapore’s third-largest taxi operator, in a significant move for the point-to-point transport sector. The undisclosed acquisition, worth more than $100 million, encompasses Trans-Cab's 2,200 taxis, 300 private-hire vehicles, vehicle workshop, and fuel pump operations.
The deal, led by Grab Rentals, marks a remarkable journey for the former Malaysian company, MyTeksi, which started in 2012. However, it remains uncertain whether the acquisition price will be disclosed to the United States Securities and Exchange Commission. Teo Kiang Ang, Trans-Cab's founder and chairman, revealed that negotiations began only two months ago and require approval from the authorities.
Teo shared his emotions, stating, "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." He plans to utilize the proceeds to explore other business opportunities, including his core business of bottling and supplying cooking gas.
Should regulatory permission be granted, the deal is expected to conclude in the fourth quarter, making Trans-Cab the first Singapore taxi company acquired by US-listed Grab. Grab's previous attempts to purchase other cab operators fell through due to offers deemed too small.
Trans-Cab entered the taxi market two decades ago, becoming the second-largest taxi firm in Singapore, surpassing SMRT Taxis, owned by the rail operator. However, earlier this year, SMRT Taxis, now rebranded as Strides, acquired Premier Taxis, overtaking Trans-Cab's fleet.
Grab's strategy involves integrating an app with mobile display units in Trans-Cab taxis. The app will allow cabbies to manage their earnings and receive bookings from both the Grab platform and Trans-Cab’s existing call centre. Moreover, Grab is exploring the possibility of adding a large display to vehicles for comprehensive job management and navigation.
Although Grab has incurred losses in various businesses, its private-hire vehicle sector has reportedly remained profitable. However, the company recently faced its highest number of layoffs, retrenching over 1,000 employees, representing 11% of its workforce.
The acquisition signals a significant development in the point-to-point transport industry, offering more ride options and innovative technology. Industry insiders anticipate that Trans-Cab drivers will benefit from improved livelihoods and enhanced competitiveness.
Grab's stock has experienced fluctuations, declining from its peak in late 2021. Meanwhile, Trans-Cab Holdings' financial statements indicate a total equity of $62.7 million in 2020, with net profit and revenue reported at around $8.7 million and $81.1 million, respectively, in 2021.
However, not all Trans-Cab drivers are fully embracing the acquisition. One cabby, Francis Goh, expressed his reservations about using Grab or Gojek apps, despite the company's sale. He believes drivers should prioritize ethical practices over choosing fares based on surge pricing.
Ride-hailing giant Grab acquires Singapore's third-largest taxi operator, Trans-Cab, in a deal worth over $100 million.
The acquisition includes 2,200 taxis, 300 private-hire vehicles, a vehicle workshop, and fuel pump operations.
Trans-Cab's founder expresses mixed emotions and plans to explore other business opportunities with the proceeds.
Source: Straits Times