SINGAPORE — Announcing its single largest deal to date, Singapore's largest taxi operator ComfortDelGro said on Friday (Dec 8) that it will pay S$642 million to acquire 51 per cent of Uber's car-rental business in the Republic.
The deal, which is subject to regulatory approval, will "create a path" for ComfortDelGro's cabbies to take on bookings via Uber's app.
Ms Tammy Tan, ComfortDelGro's group corporate communications officer, said this would happen "soon", but did not specify a start date.
"By working together, we will be able to benefit from each other's strengths. Uber will benefit from our fleet maintenance and management capabilities, while we will benefit from Uber's world-class technology," ComfortDelGro's chief executive Yang Ban Seng said in a joint statement from the two companies.
Friday's announcement came nearly four months after both companies entered into talks for a potential strategic alliance. ComfortDelGro has lost about 11 per cent of its value since announcing the negotiations, as investors lose patience over the secretive talks, Bloomberg reported on Thursday.
ComfortDelGro has also been hit hard by fierce competition from its rivals, including aggressive poaching of its drivers by ride-hailing company Grab in recent months.
At last count, ComfortDelGro had 14,306 cabs under its Comfort and CityCab brands. It lost 2,189 taxis between January and October this year, according to taxi population figures by the Land Transport Authority.
ComfortDelGro chairman Lim Jit Poh acknowledged the changes roiling the company and the broader taxi industry, saying the "business is a very different one now".
Striking an optimistic note, he added: "By working together, we feel that we will be able to unleash a lot of synergy, which will benefit consumers and drivers alike."
If approved, ComfortDelGro will acquire a 51 per cent stake in Lion City Holdings, the ride-hailing firm's wholly-owned car-rental subsidiary in Singapore, which operates Lion City Rentals and a fleet of about 14,000 vehicles. Uber will retain the remaining 49 per cent of Lion City Holdings.
"The two companies are finalising additional partnership opportunities and will make further announcements in the upcoming months," ComfortDelGro and Uber said in their joint statement. They did not elaborate.
Commenting on the deal, Grab said in a statement that both ComfortDelGro and Uber were "trying to play catch up to regain their market share". It added: "Grab and our taxi partners have out-innovated them and are in a strong position to grow our fleets, while keeping vehicle rental costs low for driver-partners."
Source: Today Online