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Before Grab acquired Uber, what type of market structure did Grab and Uber operate in?
Before Grab acquired Uber, what type of market structure did Grab and Uber operate in?
Expert Solution
Before Grab acquired Uber, the two companies operated in a type of oligopoly known as a duopoly. This market structure has two firms that hold dominance over the market. In Southeast Asia, where Grab has now acquired Uber, there are concerns about Grab now having a monopoly. With the only change being that Uber was now no longer an independent player, this indicates that there was previously a duopoly. The difficulty for new entrants to join this market and the difficulty that both Uber and Grab had with profitability or dominance independently further supports that there was previously an oligopoly or a duopoly.
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