Economy

Uber to sell Southeast Asia business to rival Grab, say sources

Uber to sell Southeast Asia business to rival Grab, say sources

Uber's retreat from the global ridesharing business continued on Monday as the company announced it was selling its southeast Asian business to Singapore-based rival Grab. No numbers have been disclosed yet, but what is confirmed is that Uber will now have a 27.5% stake in Grab and around 500 employees will make their transition to the latter. With the combined business, Grab will be able to drive towards becoming a key online-to-offline (O2O) mobile platform in Southeast Asia.

But Grab, which operates in 195 cities in eight Southeast Asian countries, became the dominant force in ride-hailing, leaving its troubled U.S. rival struggling.

On its Singapore website, Grab said passengers could expect better service with more drivers and transport options available on one app and that fares would not change.

Grab offers services in Singapore, Indonesia, the Philippines, Malaysia, Thailand, Vietnam, Myanmar and Cambodia.

But Khosrowshahi's statement released on the company's bog reads indicates that Uber would not be willing to retreat further as they already did in China and Southeast Asia.

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Uber invested $700 million in its Southeast Asia business, less than the $2 billion it burned through in China before ceding its operations there to Didi.

Why Grab? Why not Uber?

For Grab, the deal will help its meal-delivery service, which will now merge with Uber Eats, and compete with Go-Jek, a dominant player in Indonesia. "On the part of Grab, we are committed to try and find everyone a home at Grab", she said.

Grab is a rapidly expanding ride-sharing, food delivery and financial services provider in the region. And at the same time, Uber is also taking the heat in the form of high marketing expenses, required to keep up with Grab.

SoftBank's chief executive of its Vision Fund has strongly pushed for Uber to leave the Asian market behind and turn focus to known profitable regions such as Latin America. The company's average net loss expanded to $4.5 billion in 2017 as it encountered numerous improprieties and the withdrawal of its co-founder and erstwhile CEO Travis Kalanick. The US firm has taken 5.89 per cent stake in Didi.

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