Published: Thu, March 29, 2018
Money | By Hannah Jacobs

Uber sells Southeast Asia business to ride-hailing rival Grab

Uber sells Southeast Asia business to ride-hailing rival Grab

Previously after a fierce battle, Uber sold its China operations to rival Didi Chuxing in 2016 in return for a stake, and previous year the U.S. firm merged in Russian Federation with the taxi-hailing app of internet giant Yandex.

Uber today has officially announced that its operations in Southeast Asia will be acquired by its closest and fiercest regional rival, Grab.

As Uber prepares for its Initial Public Offering (IPO), CEO Khosrowshahi has been trying to clean up the company's financials.

While SoftBank and Didi are big investors in both companies, the deal considered to be huge for Grab, which has about 5 million drivers in 195 cities, recording 90 million downloads of its app and now valued at $6 billion.

The transaction entails that Uber will have a 27.5% stake in Grab with CEO Dara Khosrowshahi joining the board of the Indonesia-based company. The Uber app will continue to operate for two weeks to ensure stability for Uber drivers, who can find out how to sign-up to drive with Grab online. New entrants and the strength of second-place regional players such as Lyft the USA have complicated those efforts.

Similar to what happened to their China operations, Uber failed to adapt to how different the Southeast Asian market was compared to their operations in other territories.

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. Once that date arrives, you'll have to use the Grab app (Android and iOS) if you want to hail a ride in this region.

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

Uber's official statement is of course trying to spin it positively, saying they were able to grow the business after investing $700 million in the region.

Uber once wanted to expand all over the world, but on Monday it added to its list of big strategic retreats-with a little encouragement from its biggest investor these days, SoftBank.

And Japanese tech company SoftBank agreed to buy a 15% stake in Uber at the end of previous year. SoftBank also invested in other ride-hailing firms, such as Grab, China's Didi Chuxing, and India's Ola.

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