Uber sold its subsidiary firm in Singapore
Uber, the ride-hailing giant has once again made a deal with a local operator in the Southeast Asian country for recovering the losses. According to the latest Uber news, the company has signed a deal with the Singapore cab firm ComfortDelGro. Under the deal, Uber has sold the 51 percent stake of its car leasing subsidiary, Lion City Rentals to the cab firm. Both Uber and ComfortDelGro will together invest $474 million in the new joint-venture.
The agreement gives ComfortDelGro, the charge of maintenance and operation of the 14,000 cars of the Uber’s subsidiary. The step from the ride-hailing giant was obvious as the company experienced a loss of $1.46 billion in the third quarter 2017. The company has already shared their opinion about the Southeast Asian market and the CEO, Dara Khosrowshahi said “The economics of that market are not what we want them to be. I think it’s over-capitalized at this point. We’re going in, and we’re leaning forward. But I‘m not optimistic that market is going to be profitable anytime soon.” This could be seen by the company’s previous action of joining hands with Yandex to get a big exposure in Russia.
Joining the team with a local rival in Singapore not only gives the Uber access to Comfort’s 15000 cars but also will reduce the cost of leasing cars in the county. The biggest problem that Uber has ever come across with all its rivals in Southeast Asian countries was the high cost of car leasing to the drivers. This was the reason Uber started pushing the causal drivers to commercial driving by owning a car. Recently, Singapore also put a curb on the private car ownership which made the Uber shake hands with the local cab firm. Considering the Asian markets including Singapore, Malaysia, and India, requires Uber to drop cost on its car- leasing service to leverage them up to their full potential.
Grab, ride-hailing service and Uber’s all-time competitor started as an app for booking ride and slowly joined forces with many cab services in the Singapore. Now, Uber is using the same way to grow its market in the country with the help of ComfortDelGro. Lion City Rental was also in the news when it was criticized for renting out fire-prone cars and one accidentally caught fire during the ride in August.
Under the leadership of new CEO, Dara Khosrowshahi the company is changing its longtime strategies to cope up with the loses. He also revealed the system hack and user’s data has been stolen last year that Uber kept buried all this time. With all these actions the company is preparing itself for the 2019 IPO.
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