Grab & Prime offers to buy SMRT’s taxi business

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Prime is also looking to join in the fray after Grab made an offer to buy out SMRT’s taxi business. Prime currently operates a small fleet of taxi but has private hire operations as well.

Prime chairman Neo Nam Heng said: “We’re definitely interested, but the question is how much they are willing to sell at.

“When we bought their (SMRT’s) car rental business, it was making losses. By the second year, we made it profitable.”

This was in reference to Prime’s $13.5 million purchase of Tibs Leasing from SMRT in 2003. Prime is currently Singapore’s smallest taxi operator, with a fleet of just over 700 vehicles.

SMRT, the third-largest operator here, has about 3,400 cabs. SMRT’s taxi business has not been profitable until recent years but with the advent of private hire services, looks set to be in the red once again.

Prime said that Grab had made a similar offer to buy their taxi operations last year but they had no intention of selling it.

“We want to grow the business,” Mr Neo said.

Commenting on the sale, SMRT chief executive Desmond Kuek said: “We have a very good partnership with Grab, with Strides, our private-hire services, as well as our taxi business. And we continue to look for all kinds of ways to partner and cooperate with them.”

SMRT’s sale talks with Grab will depend on Grab being willing to hire all affected employees including those from the Strides private-hire and Bus Plus premium bus operations.

This appears to be the sore point as Grab is said to be unwilling to increase its headcount at the moment. Grab has refused to comment on this issue.

Meanwhile Trans Cab, the second-largest cab operator here, said the sale would be a positive development.

Trans Cab managing director Teo Kiang Ang said: “Even though it is relatively new, Grab seems more familiar with the taxi industry and issues faced by cabbies.”

 

When asked if Trans Cab would be interested in making a similar bid, Mr Teo rightfully pointed out that the issue was not one of vehicles but of drivers. There were not enough taxi drivers to meet the supply as many have moved on to private hire services.

Consolidation in the taxi industry seems a foregone eventuality at this point.