Uber exits South-East Asia market with sale to Singapore-based rival

Randal Sanchez
March 29, 2018

Uber will sell its business in Southeast Asia to a local competitor, Grab, the ride-hailing company announced late Sunday, in a deal that experts say is created to position Uber for an initial public offering next year.

Grab Philippines (GrabPH) country head Brian Cu, in a statement on Monday, said the two biggest ride-hailing firm in the country have "come together" to serve the Filipinos better, adding that this was an important milestone in the ridesharing industry.

As Uber prepares for its Initial Public Offering (IPO), CEO Khosrowshahi has been trying to clean up the company's financials. Previously Uber sold its China business to Didi Chuxing and merged its Russian Federation operations with tech firm Yandex. The deal will also see Uber CEO Dara Khosrowshahi joining the board of Grab.

A heatmap showing the demand for Grab services in Southeast Asia is displayed during Grab's fifth anniversary news conference in Singapore June 6, 2017.

The deal represents another major retreat from global markets for Uber, following its withdrawal from China in 2016 and Russian Federation in 2017.

Singapore-based food delivery and rideshare service Grab has agreed a deal to acquire Uber's South East Asian operations, including the UberEats food delivery service.

US destroyer sails near South China Sea island
The South China Sea, a strategically and economically key maritime region, is disputed between numerous countries in the region. It said two Chinese Navy ships "took immediate action to identify and verify the USA ship, and warned and dispelled it".

So does this mean we can likely expect more consolidation in markets where Uber faces stiff competition? Financial details were not disclosed.

"Today's acquisition marks the beginning of a new era", said Grab chief executive Anthony Tan.

Grab says it operates in 191 cities in the region - about three times as many as Uber - and also offers motorbike, carpooling and cashless payment services. "It will help us double down on our plans for growth". With the combined business, Grab is aiming to be the leading online-to-offline (O2O) mobile platform in Southeast Asia, as well as a major player in food delivery. Early past year, Didi invested $100 million in USA -based Lyft, Uber's main rival at home.

"It is fair to ask whether consolidation is now the strategy of the day, given this is the third deal of its kind, from China to Russian Federation and now Southeast Asia".

SoftBank is also one of the main investors in several of Uber's rivals, including Grab, China's Didi Chuxing, and India's Ola.

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