With 45 investors supporting the business, including Invesco, Experian Ventures, and Softbank Vision Fund, the proposed fine puts a dent in the company’s reputation following its July US$2bn 5-year Softbank-backed digital infrastructure plan to expand into Indonesia.
Following the merger between Grab and Uber in late March 2018, Grab swiftly became the dominant player in the e-hailing market in Malaysia. Since the merger, MyCC reported that it has received numerous complaints against Grab, triggering its assessment and ultimate investigation against Grab.
The company could feel more pressure to pave its way to profitability, as stakeholder Uber, which had a private valuation of $76bn ahead of its IPO in May, has seen its valuation drop as its share price has dwindled. The company now has a market cap of roughly $49bn, according to CNBC.
Rival Lyft, has a market cap of $11.6bn, said CNBC, a considerable difference from its private valuation of roughly $15bn.
“It is important that barriers to entry for new players remain low and for existing players to have the ability to grow and compete on merits to ensure that competition can remain healthy in the e-hailing market and other related markets,” said Encik Iskandar Ismail, Chief Executive Officer of the MyCC.
Does Grab have a case?
“It is the opinion of MyCC that Grab’s conduct not only affect e-hailing drivers and competitors but also the consumers in the long run. This is not the final decision. Thus, Grab has the opportunity to present its defence to MyCC in due course,” he said.
MyCC also proposed a daily penalty of RM15,000 per day from the date of service of the Proposed Decision (3 October 2019) should they fail to take remedial actions as directed by the Commission in addressing the competition concerns.
Lyft and Uber drivers (outside Malaysia) do not have this problem. According to the rideshare driver website, ridester.com, if you want to pick up Lyft and Uber customers, without getting taken out of driver mode, you will need to have both the Lyft and Uber apps open to use both at the same time.
However, the Uber Partner app will take you out of driver mode automatically if you have it running in the background, said the report.
“This is a subtle way for the company to keep you from driving for Lyft at the same time, but you can get around it by keeping the Lyft app open in the background instead (so that you can still receive Lyft ride requests). As long as you currently have the Uber Partner app open, you can receive and accept rides and requests,” ridester reported.
Look out for my article next week on a family office-backed UK fintech start-up that could be just what the Gig economy has been waiting for.