Yesterday, news broke that ComfortDelGro Corporation had signed an “exclusivity letter” with Uber. The talks were regarding the formation of a “potential strategic alliance” for the management of fleet vehicles, and booking software solutions in Singapore.
According to an article on Channel NewsAsia, this led to the stocks of the taxi operator increasing a good 8.76% to conclude SG$2.36. The alliance would see ComfortDelGro’s fleet of more than 15,000 vehicles be made available on Uber’s app. According to the announcement on Singapore Exchange, ComfortDelGro believes the potential strategic alliance will “strengthen” its position as a “major mobility service provider” in Singapore.
While many were surprised by the move, Lawrence Chong, chief executive officer of Consulus said the move was expected, given ComfortDelGro is one of the last taxi operators to have tied up with a major ride-booking app.
However, he was quick to add that the company needs to holistically rethink its entire business model, as it is the largest operator for taxis in Singapore. It needs to revaluate not only how it shifts with consumer habits but also rethink its relationship with internal staff, operators and drivers.
“The company has to reassess its role in the rapid transformation that is impacting how Singaporeans move, and use a total value chain approach to redesign its value,” he said.
Read the full article here.