Ride-hailing firm Uber Technologies has agreed to sell its Southeast Asia business to bigger regional rival Grab, a source with direct knowledge of the matter said yesterday, in what would be the USA company's second retreat from Asia. In return, Uber will own a 27.5-percent stake in Grab. He did not want to be identified as the deal is not public yet.
The US company said it invested a total of $700 million in the region. After failing to compete with the local rival, it chose to sell its business to the competitor in exchange for a stake back in 2016. Softbank is one of the main investors of the Uber rival Grab. Completely new Grab driver are required to sign up. 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.
Grab said it will take over Uber's operations and assets in eight countries in the region, and will expand its food delivery services.
So does this mean we can likely expect more consolidation in markets where Uber faces stiff competition? Khosrowshahi said that it will assist us in dueling down on our suggestions for expansion as we expend deliberately in the products and technology to generate the supreme customer experience on the planet.
Grab has been seeking to dominate the regional market for auto and motorbike hailing and has expanded into other areas, recently announcing plans to partner with a Japanese credit card company to provide credit to millions of people without bank accounts.
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The countries included in the operation are: Cambodia, Indonesia, Malasia, Myanmar, the Philippines, Singapore, Thailand and Vietnam. A more robust food service will give Grab an advantage over Go-Jek, according to a person close to Grab.
"Today's acquisition marks the beginning of a new era", said Grab CEO and co-founder Anthony Tan. "The combined business is the leader in platform and cost efficiency in the region".
And Japanese tech company SoftBank agreed to buy a 15% stake in Uber at the end of a year ago.
"One of the potential dangers of our global strategy is that we take on too many battles across too many fronts and with too many competitors", Khosrowshahi said in one email. Uber meanwhile continues exiting markets, including the aforementioned China and also Russian Federation.