Abril 20, 2018

Uber selling Southeast Asian business to regional rival Grab

26 Marcha 2018, 09:50 | Benedicto Grullon

New hires relax at a lounge area in a Grab office in Singapore Sept 23 2016

New hires relax at a lounge area in a Grab office in Singapore Sept 23 2016

Even so, the move means another retreat from Asian operations for Uber since it already sold its China business to local company Didi Chuxing in 2016. Uber will submit transfer its business lines in Southeast Asia to Grab, including Uber Eats.

Grab will integrate Uber ride-sharing and food deliver service in region into its existing platform, towards becoming the #1 online to offline platform in Southeast Asia. Uber is planning to acquire a 27.5 percent stake in Grab and Uber CEO Dara Khosrowshahi will join the firm's board. The deal has yet to be finalized pending regulatory approval. Uber drivers are encouraged to start their registration process with Grab as soon as they can, to ensure that they can continue to drive after Uber service closes. Riders, likewise, will need to download the Grab app and set up accounts, although their Uber accounts will still work outside Southeast Asia.

Uber CEO Dara Khosrowshahi has been putting efforts to improve the company's financial status which has recorded several losses recently. While Grab takes over Uber's operation in Philippines, Myanmar, Malaysia, Cambodia, Thailand, Singapore, Vietnam, and Indonesia. Fares will continue to be calculated based on a base distance with dynamic surcharges for services like GrabCar and GrabBike; taxi rides booked through Grab will have metered fares like before; and GrabHitch will have fares sticking to the usual fixed amounts.

In the past few years, Uber Technologies was a destructive rival for Singapore-based ride-hailing app Grab.

Last year, Uber lost $4.5bn (£3.2bn) - and its chief executive - as it underwent a fundamental shake-up following a harassment scandal.

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

Alternatively, the deal could place Grab in a monopolistic position, allowing it to have control in raising vehicle rental rates, reducing subsidies and changing fare structures, Mr Chua said.

There have been speculations about Uber and Ola joining forces in the Indian market.

"Didi fully supports Grab's acquisition of Uber's Southeast Asian operations, and looks forward to continuing a long-term relationship with Grab as a strategic investor", a Didi representative told Caixin.

His next big challenge is Indonesia, Southeast Asia's biggest market-where he will be taking on former Harvard classmate Nadiem Makarim, the CEO of ride-hailing market leader Go-Jek.

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