Saturday, March 31, 2018

Thoughts on the Uber-Grab Merger

Anyone who was under the impression that the pre-merger situation was the norm must have been painfully unaware of how unsustainable the situation was. In the first place, both Uber and Grab have been running prodigious losses (to the order of hundreds of millions per year), obviously as part of a strategy for acquiring market dominance. The endgame was always to become a monopoly, and then to extract profits.

It's far too late to cry of monopoly now. The public didn't when the prices where low, even as Uber-Grab used investor money to subsidize drivers and riders. Nobody cares about anti-competitive behavior when it makes fares cheaper.

Halting the merger or other steps to impose competition might prevent price gorging, but the inevitable fact is that prices will rise. Eventually, at least. Nobody will like it, but no company is in the business of losing money.