Uber, a transportation network company, is planning to sell its Southeast Asia units to Singapore’s Grab in exchange for a stake in the company according to trusted sources.
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Including the Philippines, Grab currently operates in more than 100 cities in Southeast Asia. The company has also claimed 95 percent market share in taxi ride-hailing as well as announced plans to raise more than $2.5 billion from SoftBank and other investors in 2017.
This strategy is greatly similar to Uber’s move in China where the company sold its ride-hailing operation to Didi, the ride-sharing giant of China, for 20% ownership. Uber also made the same move in Russia where the company combined its local business with Yandex’s ride-hailing business for a 37% share. Both moves were made in order to aid Uber reel in its costs in preparation for an IPO as soon as next year.
Uber CEO Dara Khosrowshahi has also mentioned the following statement,
“I think the team ran through an inventory of where we competed, and if we compete on let’s say even on a dollar-for-dollar basis against the local player, paying the same amount to drivers, collecting the same amount from riders, in general where we are now is, if both players are kind of spending equally we tend to win share. We’ve got a better brand, we’ve got better technology, better network, etc. Whatever it is, we tend to win share. There’s certain markets, China and Russia, where that wasn’t true. And if your only competitive advantage, or the only reason you can be in a market is because you can spend money, that’s not exactly a reasonable proposition.”
As of now, there is still no news of a deal being made between Uber and Grab.
