The deal, Grab’s first local competitor acquisition, is expected to close in the fourth quarter of 2023 and includes “Trans-cab’s taxi and car rental business, maintenance workshops and fuel pump operations.” Founded in 2003, Trans-cab started with a fleet of 50 taxis and tried to go public twice. It now operates a fleet of more than 2,500 vehicles.

The financial terms of the deal were not disclosed, but according to a report by The Straits Times, the acquisition size is estimated at around $75 million.

The Nasdaq-listed ride-hailing giant says the acquisition will allow Grab to provide a more extensive base of drivers. Grab wants to address Singapore’s driver shortage issue as ride demand rebounded after the city state lifted the pandemic restrictions.

“By boosting the number of drivers on our platform and helping them to operate more efficiently, we improve how quickly and reliably we find a ride for our passengers whenever they need one,” Yee Wee Tang, managing director of Grab Singapore, said in a statement.

The purchase comes just a month after the Southeast Asian super app operator laid off more than 1,000 employees, or about 11% of its staff.

Trans-cab drivers will join the Grab platform and receive benefits provided to the current Grab drivers, including free coverage through Grab’s Personal Accident Insurance and access to the GrabAcademy program, which helps the drivers learn skills, including data analytics and digital marketing. Rewards through loyalty programs also will be provided to the drivers.

Grab plans to integrate its driver application into Trans-cab’s mobile display units to digitize the business. Grab’s technology will enable Trans-cab taxi drivers to manage their earnings and receive bookings from Grab’s platform and the existing call center of Trans-cab.

“Consumer behaviors have shifted and we’ve recognized for some time the need to digitize the business and ensure our taxi drivers can continue to be competitive,” Jasmin Tan, general manager of Trans-cab, said.  

Consolidation via mergers and acquisitions is on the rise in the tech industry as tight private capital and a slow initial public offering market due to the economic downturn are impacted by growing inflations and high-interest rate headwinds.

In April, Singapore’s SMRT announced its ride-hailing operator Strides Taxi would merge with Premier Taxis to bring together a combined fleet of about 2,500 taxis, becoming the country’s second-largest taxi operator. ComfortDelGro has about 60% of the market share in Singapore, with a fleet of about 8,800 taxis.