In what could be a major turnaround of events for Uber, the company sold its business in Southeast Asia to Grab, a Singapore-based ride-hailing company. The battle for the market saw Uber go all out against Grab, only to cede its business in the end. As per the agreement reached between the two companies, Uber will get a 27.5 per cent stake in Grab in exchange of handing over its businesses (taxi-hailing and UberEats) to Grab.
Grab will now control Uber’s businesses in 8 Southeast Asian nations, namely Singapore, Indonesia, Myanmar, Cambodia, Malaysia, the Philippines, Vietnam, and Thailand.
Uber’s CEO, Dara Khosrowshahi will also join the board of Grab as per the deal.
While Grab was established in 2012, Uber made its foray into the Southeast Asian market in 2013, with both companies locked in a battle ever since. The fight to establish itself as the leading player in this market cost Uber around $200 million each year.
Uber, which has tried to expand its presence in other countries has faced similar problems in the past. While it sold its operations in China to Didi Chuxing for a 17.5 per cent stake in the Chinese company, it also merged its operations in Russia with Yandex NV, with Uber getting a 36.6 per cent stake in the new entity. Uber had lost close to $2 billion in its battle in China.
With SoftBank being a major investor in both Uber and Grab, it was speculated that a merger might be on the cards. The merger will add to Grab’s existing strength of over 2.1 million drivers in the region.
With regards to operations in India, both Uber and Ola are locked in a battle for supremacy. With Ola recently receiving over a billion dollars in funding, it remains to be seen how this battle pans out.