Uber agrees to sell Southeast Asia business to Grab after costly battle

Wednesday, 28 Mar, 2018

Yesterday, Uber Technologies Inc agreed to sell its Southeast Asian operations to Grab, withdrawing from yet another fast-growing region to end a war of attrition with a fierce local rival.

Competition between ride-hailing apps has been heating up in Southeast Asia, with the market forecast to grow more than five times to United States dollars 13.1 billion by 2025, according to a 2016 report by Singapore sovereign wealth fund Temasek. Like the prior transactions, the deals free Uber to invest in other, more lucrative markets, while granting the company a stake in their competitors' expanding businesses, experts say. Grab, available on the App Store for iOS and Google Play for Android, now offers more than 10 transportation services including GrabTaxi (a taxi-hailing service), GrabHitch (a carpooling service), GrabShare (a ride-sharing service similar to UberPool and LyftLine), GrabBike (a motorbike hailing service), and GrabFood (Grab's food delivery service). For drivers, it said the benefits and incentives structure remained the same.

In the year following Didi Chuxing's acquisition, driver response rates fell between 15 and 40 per cent in major Chinese cities, according to Didi Chuxing's data.

Based on Grab's most recent valuation, the deal could be priced at least US$1.65 billion (RM6.43 billion). In Indonesia, Go-Jek was at No. 9 just ahead of Grab.

By the time Uber Eats set up shop in Bangkok in 2017, Foodpanda had already been running with a five-year head start.

In a statement, Grab Philippines said the rides will become more affordable because of the larger fleet of drivers on their platform.

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

With Uber, he said, Grab is now in an even better position to fulfil its promise in serving customers, while improving people's lives through food, payments and financial services. The app also encrypts passenger phone numbers and uses public landmarks like taxi stands as pickup points, instead of revealing passengers' addresses.

Ms Nancy said she met Grab on Monday following news of the acquisition.

"We believe that this buyout is not favorable to the Filipino commuters as it would lessen choices for all of us". Six years into Grab's launch in 2012, the localized ride-sharing service boasts 81 million mobile app downloads and 2.3 million drivers in 178 cities across Singapore, Indonesia, the Philippines, Malaysia, Thailand, Vietnam, Burma, and Cambodia.

"Grab provides enough promotions for my liking, and even if sometimes they don't, I don't mind paying the full price", said Choltanutkun Tun-atiruj, a magazine writer, who said she preferred Grab's services and relied on it in her everyday life.