Uber has called it quits on another market

Katie Ramirez
March 27, 2018

Singapore-based technology company Grab said here Monday that it has acquired Uber's Southeast Asia operations, recording the largest acquisition by a Southeast Asian internet company.

Ride-hailing giant Uber is selling its business in Southeast Asia to regional rival Grab in its latest withdrawal from a daunting overseas market.

Uber's operations will become part of Grab in Southeast Asia, which includes countries such as Cambodia, Indonesia, Malaysia, Myanmar, the Philippines, Singapore, Thailand and Vietnam.

Softbank is also a major investor in Grab, and is known for pushing for consolidation in the global ride-hailing industry, which has been losing billions of dollars a year due to turf wars.

This deal will give Grab a strong holding in Southeast Asia, giving tough competition to its Indonesian rival Go-Jek, which is backed by Google and Tencent Holdings.

Market watchers said Uber's surrender in Southeast Asia - one of the world's fastest-growing economies with over 600 million people - could be a boon to Didi, as it has been gearing up for an global expansion. The U.S. company's focus will shift toward its operations other key markets in India and Japan, according to Uber CEO Dara Khosrowshahi. Uber will get a 27.5% stake in the combined firm, 500 staff will transition to Grab, and its customers will be shifted over to Grab's apps.

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However, acquiring Uber's Southeast outlets will offer Grab a big opportunity to completely dominate ride-hailing services in the entire region.

Uber is preparing a potential initial public offering in 2019, but previous year it lost $4.5bn as it underwent a fundamental shake-up following a harassment scandal. In the media release, it was announced that all existing Uber drivers and riders, as well as Uber Eats customers, partnering eateries and delivery partners will be eventually migrated to the Grab platform. Uber also merged its Russian operation into local firm Yandex past year, where they both are setting up a yet-to-be-named company.

The deal enables Uber to keep a foothold in the increasingly affluent market of 640 million people while cutting its losses.

As it stands, Grab operates in eight countries.

Uber's deal with Grab would be similar to the one struck in China in 2016, when a bruising price war ended in Didi Chuxing buying out Uber's China business in return for a stake in the company.

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