Grab Rentals, a car rental unit of Singapore’s ride-hailing and food delivery company Grab, has reached an agreement to acquire Trans-cab, the third largest taxi operator in the city-state.
This marks Grab’s first acquisition of a local competitor and is anticipated to be finalized in Q4 2023.
The deal encompasses Trans-cab’s taxi and car rental business, maintenance workshops, and fuel pump operations.
Trans-cab, established in 2003, initially operated with a fleet of 50 taxis and has since expanded to over 2,500 vehicles.
Although the financial details remain undisclosed, the acquisition is estimated to be valued at approximately $75 million.
By acquiring Trans-cab, Grab aims to address the driver shortage issue in Singapore and enhance its driver base, as ride demand recovers following the pandemic.
The integration will offer Trans-cab drivers access to Grab’s benefits, including free coverage through Grab’s Personal Accident Insurance, participation in the GrabAcademy program to acquire skills such as data analytics and digital marketing, and rewards through loyalty programs.
Grab plans to digitize Trans-cab’s business by integrating its driver application into Trans-cab’s mobile display units, enabling drivers to manage earnings and receive bookings through Grab’s platform and Trans-cab’s existing call center.
This acquisition follows Grab’s recent workforce reduction of approximately 11% and reflects the trend of consolidation through mergers and acquisitions in the tech industry, driven by limited private capital and a sluggish IPO market due to economic challenges posed by inflation and high-interest rates.
In April, Singapore’s SMRT announced the merger of its ride-hailing operator Strides Taxi with Premier Taxis, creating the second-largest taxi operator in the country with a combined fleet of around 2,500 taxis.
ComfortDelgro currently holds a majority market share of approximately 60% with a fleet of about 8,800 taxis.