- GrabCab’s launch brings a new competitor to Singapore’s taxi sector, but its small initial fleet and gradual expansion should have a limited impact on ComfortDelGro. Investors should not be overly concerned, as ComfortDelGro’s diversified earnings base and scale in Singapore’s taxi market provide resilience, while Grab’s driver incentives are likely transitory.
GrabCab taxi service in Singapore.
- - Read this at SGinvestors.io -
- - Read this at SGinvestors.io -
Investors' concerns.
- Investors may be concerned that GrabCab’s entry will intensify competition for drivers, leading to potential declines in ComfortDelGro’s taxi fleet utilisation and rental income in the near term.
- Generous driver incentives and Grab’s strong ride-hailing platform could lure drivers away from incumbents, pressuring margins. This, we believe, has created a short-term impact on the sentiment on ComfortDelGro's share price, as the market is gauging the competitive threat.
We believe GrabCab’s launch should not negatively impact ComfortDelGro.
- Read more at SGinvestors.io.
