Southeast Asian super app Grab will acquire a 100% stake in Trans-cab, Singapore’s third largest taxi operator, through its arm GrabRentals, the company said in a statement on Thursday.
The transaction is expected to close in the fourth quarter of 2023, subject to regulatory approvals and other customary closing conditions.
Established in 2003, Trans-cab has a combined taxi and private-hire-vehicle (PHV) fleet of 2,500 vehicles. This acquisition includes Trans-cab’s taxi and car rental business, maintenance workshop, and fuel pump operations, according to the statement.
Trans-cab general manager Jasmine Tan said the need to digitise the taxi business has become increasingly important to ensure the company’s taxi drivers can thrive in the competition. “We are confident that this deal protects their future,” Tan said. “We are entering this deal with full assurance that Grab will do its best to safeguard the livelihoods of our taxi drivers.”
Following this acquisition, Grab will launch an enhanced Grab Driver application that will be integrated with the Mobile Display Units in Trans-cab taxis. This way, Trans-cab taxi drivers will able to manage their earnings and receive bookings both from Grab as well as Trans-cab’s existing call centre using one platform.
Grab also plans to combine software with vehicle hardware to improve the driving and taxi-sharing experience. Trans-cab drivers that join the Grab platform will also receive benefits offered to all Grab driver-partners.
“I feel assured that with Grab, we have found the right partner to hand over Trans-cab to, who will do what is best for the drivers and the business,” said Teo Kiang Ang, founder and chairman of Trans-cab.
For Grab, this deal is a strategic match with win-win outcomes for all, according to Grab Singapore managing director Yee Wee Tang. “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.”
Singapore has been facing a driver supply shortage post-pandemic, prompting ride-hailing firms to take steps to increase their fleet of drivers. In November last year, Gojek partnered with Singapore’s largest taxi operator ComfortDelGro in an effort to combat the supply crunch issue.
Grab, founded in 2012 and listed on the Nasdaq in December 2021, offers deliveries, rides and financial services in eight Southeast Asian countries, including Indonesia, Malaysia, Philippines, Singapore, Thailand, and Vietnam.
In May, Grab reported a quarterly loss of $250 million, down 43% year-on-year. Its revenue in the first quarter of 2023 rose 130.3% to $525 million from a year ago. It has set a target to achieve group adjusted EBITDA breakeven this year.
Grab announced in June that it is cutting 1,000 jobs or 11% of its workforce to rein in costs. In 2020 it laid off 360 people due to the impact of the pandemic.