StockTalk(7.20): Grab acquires Trans-Cab - A key strategy to overcome losses?
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$Grab Holdings(GRAB.US$, the ride-hailing giant, has acquired Singapore's third-largest taxi operator, Trans-Cab, for an undisclosed amount believed to be around $100 million.
The purchase includes over 2,200 taxis and more than 300 private-hire vehicles. If approved, this will be the first Singapore taxi company to be acquired by Grab, which has been trying to buy a cab operator for several years. The taxi industry has struggled since private-hire operators entered the point-to-point transport sector in 2013. Grab has incurred losses since its inception in 2012, but its private-hire vehicle business is reportedly profitable. Last month, the firm retrenched over 1,000 employees, representing 11% of its workforce.
What impact will the acquisition of Trans-Cab have on Grab's stock price, considering that the company has been incurring losses since its inception in 2012?
Do you think this acquisition is a step towards restructuring the ride-hailing and taxi industry, and how will it affect the industry as a whole?
Do you think this acquisition is a step towards restructuring the ride-hailing and taxi industry, and how will it affect the industry as a whole?
Join us and share your thoughts on today's topic. Please leave a comment below to share your opinion with us. Your feedback is valuable, and we appreciate your participation.
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What do you think about Grab's acquisition of Trans-Cab in Singapore?
Join us and share your thoughts on today's topic. Please leave a comment below to share your opinion with us. Your feedback is valuable, and we appreciate your participation.
Roger P : lesser competition, means flexibility for grab to change prices. could bring more margin revenue
Chris Ivan Ang : Not a wise move strategically to lateral acquire as their platform mandate previously was to be asset light. Buying over a taxi company means that they will also take over the depreciating fixed assets (i.e. the taxis) hence, you’ll see bigger depreciation write offs on the BS. And in Singapore depreciation is high. Unless Grabs strategy is to use those write offs for Tax credits? Even then, company has to make profits first…. Hmmm…
Elvis Wang : It might be a necessary move to gain market share from ComfortDelgro..Grab is already ahead in terms of application services
Mr Careful : they want to use this as a stepping stone to gradually takeover the entire taxi industry of sg. should not be that difficult to them, considering how they knock uber out.
Gong Xi Fuck Cai ❤ : Once grab start to becomes one of the biggest taxi operator, it will slowly acquire other area like grab lorry, grab bus, grab toilet or even grab anything! If they monopolize they can adjust any fees they like.
ZnWC : My first reaction is after reading the article is there'll be more available taxi for Grab customer to hail. This is good news to Grab user but not for Taxi driver and industry because it means more competition.
The acquisition is definitely a good move by Grab to increase market share and revenue which is positive from the share price point of view. But it is too early to say if it can restructure the taxi industry unless there's any change in taxi fee.
There's also speculation about further acquisition or merger. If this is true, ultimately there may be only 2 or 3 major players which will dampen competition - bad news for consumers. The solution for Grab to turn losses to profit is perhaps how to build an ecosystem for the services the company provides.
Peonies : will benefit CDG and Silvercab, most will jump out of TC, from what uncles discussed during kopi break unless there's good incentives then is a different ball game.
⥣LiD1016⥣ : Better internet development and flexible office systems, combined with increasingly expensive license plate prices, are long-term negative factors for the transportation industry, particularly private car hire. Another major problem right now is that the cooling of the real estate market and the rise in office space costs will all hit the taxi industry.
Shootingstar : Sg coe prices are increasing exponentially. They should shift their focus to finance more then transportation.
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