Grab Holdings Limited and Trans-cab Holdings Ltd have on Thursday announced the signing of an agreement for Grab Rentals Pte. Ltd. to acquire 100 percent of the shares in Singapore’s third largest taxi operator Trans-cab.

Grab said in a statement that Trans-cab, a local brand that has been serving Singaporeans since 2003, has a combined taxi and private-hire-vehicle (PHV) fleet of more than 2,500 vehicles, and is accretive on a net income basis to Grab’s business.

According to the statement, the acquisition includes Trans-cab’s taxi and car rental business, maintenance workshop, and fuel pump operations.

“We see this as a strategic match with win-win-win outcomes for all,

“By boosting the number of drivers on our platform and helping them to operate more efficiently, we improve how quickly and reliably we find a ride for our passengers, whenever they need one,” said Yee Wee Tang, Managing Director, Grab Singapore.

Meanwhile, Trans-cab General Manager Jasmine Tan said consumer behaviors have shifted and the firm has recognized for some time the need to digitize the business and ensure its taxi drivers can continue to be competitive.

“We are confident this deal protects their future. Grab’s industry-leading tech will help our taxi drivers drive more productively and safely while serving their passengers better,” she said.

According to the statement, Grab plans to launch an enhanced Grab Driver application that will be integrated with the Mobile Display Units in Trans-cab taxis.

The app will enable Trans-cab taxi drivers to manage their earnings and receive bookings from the Grab platform as well as Trans-cab’s existing call center, all through a single platform.

With Grab’s allocation technology, Trans-cab drivers will be assigned bookings in a highly efficient and intelligent way, maximizing their productivity so they can earn more.

Grab also plans to explore combining software with vehicle hardware to further enhance the driving experience.

For example, Grab is exploring a pilot to place large displays in-vehicle where drivers can manage all jobs including street hail through one interface, with additional features like navigation that drivers can choose to use.

Additionally, Grab plans to use tech to improve the taxi-sharing experience, which is currently done manually between taxi drivers on an ad-hoc basis.

According to the statement, Trans-cab drivers that join the Grab platform will also receive benefits offered to all Grab driver-partners, including free coverage through Grab’s Personal Accident Insurance whenever they are online on the Grab platform, as well as access to GrabAcademy, where they can pick up skills from a wide range of free courses from data analytics to supply chain management and digital marketing.

Driver-partners can also participate in Grab’s loyalty programs for additional rewards.

Grab said that Singapore has faced an industry-wide driver supply crunch since the pandemic, resulting in higher fares as prices surge due to demand and supply imbalance.

It said Grab has worked on a number of initiatives to improve driver supply, whether by streamlining its onboarding process for new driver-partners, or by optimizing its current driver-partner pool through tech.

It also said acquiring Trans-cab’s taxi and car rental business will give Grab a larger base of driver-partners, benefiting passengers with more reliable allocation, especially during peak hours.

It said GrabRentals, the private-hire car rental arm of Grab, is also expected to benefit from greater operational efficiency and reduced costs by tapping into Trans-cab’s experience and expertise in fleet support through its maintenance workshop.

It said a larger fleet size will also allow GrabRentals to derive savings from scale in areas like auto insurance premiums and procurement of parts.

It is noted that the board of directors of Grab and Trans-cab have approved the transaction.

The transaction is currently expected to close in the fourth quarter of 2023, subject to regulatory approvals and other customary closing conditions.

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