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$220m Uber deal is off, says Singapore’s ComfortDelGro

Taxi giant ComfortDelGro Corp and ride-hailing firm Uber have agreed to dissolve the  strategic agreement that they entered into last December.
Both companies entered into the agreement with ComfortDelGro agreeing to pay S$295 million ($220 million) for the stake in Uber subsidiary Lion City Holdings Pte Ltd.

In a statement on Friday (May 25), ComfortDelGro said it will no longer be acquiring a 51 per cent stake in Uber’s wholly owned car rental subsidiary in Singapore, Lion City Holdings.

The acquisition, valued at about $642 million, was dependent on the taxi operator being able to use the Uber app here. But since Uber decided to pull out of the South-east Asian market in March, that is no longer possible.

The Uber app was switched off on May 7.

Following Uber’s exit from the region, Comfort had reportedly told its taxi drivers to delete the Uber app on their phones.
As a result of the deal being called off, ComfortDelGro said an application to the Competition and Consumer Commission of Singapore will be withdrawn. The application was for the commission to approve the alliance.

ComfortDelGro chief executive Yang Ban Seng said: “The operating environment has changed and the basis on which we were supposed to form the partnership is no longer relevant, given that Uber has exited the region.

“Nevertheless, the group still has every intention to go into the private-hire vehicle space as we see the increasing convergence of private-hire vehicles and taxis in the personalised mobility market.”

ComfortDelGro’s announcement comes a day after Indonesian ride-hailing app firm Go-Jek said it would be entering the Singapore market in the next few months.

The Straits Times understands that Go-Jek has approached ComfortDelGro for a tie-up. If such a tie-up materialises, ComfortDelGro is likely to buy up excess cars in the private-hire sector, estimated to run into the thousands.

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