Uber, the ride-hailing giant is preparing for its exit from another sizeable market. According to the reports, Uber is selling its Southeast Asia business to its all-time competitor Grab. However, the financial figures of the deal have not been disclosed yet but Uber will own 27.5 percent of the company’s stake.
The news was circulated among Uber employees first via an email from Uber CEO, Dara Khosrowshahi. In the mail, he announced that Uber is selling its whole Southeast Asia business to Grab and he is also joining the company’s board. The mail also discloses that 500 Uber employees will also be going under Grab with the transition.
As a part of the deal, Grab will also be acquiring Uber’s food-delivering service, UberEats in that region. Launched in 2012, Grab is considered as Uber’s top notch competitor in Southeast Asia and has raised over $4 billion till now. The company also offers a payment service named GrabPay for its Southeast Asian market and recently launched financial service platform.
“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 Russia and now Southeast Asia,” Khosrowshahi mentioned in the mail. “The answer is no. One of the potential dangers of our global strategy is that we take on too many battles across too many fronts and with too many competitors. This transaction now puts us in a position to compete with real focus and weight in the core markets where we operate, while giving us valuable and growing equity stakes in a number of big and important markets where we don’t.”
This is not the first time Uber is taking off from a big taxi-hailing market, in 2016 the company surrendered its China business to local rival DiDi. Afterward, In 2017 Yandex the Russia based ride-hailing company took over Uber’s market in the country. However, the Grab’s deal is different from previous two business deals of Uber, where Yandex and DiDi held a joint venture with Uber in return for major ownership. On the other hand, Grab will be acquiring entire business of Uber in Southeast Asia.
The Southeast Asia market consists of eight Asian countries with complex and different demands of each market. Uber always struggled in meeting the consumers’ needs comparing to Grab, which leverages of being native to come up with different strategies for every individual country.