The ride-hailing market can have competition between platforms getting so fierce that the loser can run the risk of literally going out of business. The one-time global ride-hailing brand giant, Uber, had been in a fierce contest for customers in Southeast Asia with a local rival: Grab, a similar but regionalized service based out of Singapore. Founded in 2012, its operations eventually expanded from its small home nation to many of its neighbors: Malaysia, Indonesia, Thailand, Vietnam, Cambodia, Myanmar, and the Philippines itself. Now however, Uber is quitting the SEA market and foisting its business in the area to Grab.
CNN Philippines has it that Uber has given up on establishing a presence in Southeast Asia, and is selling its business to Grab – formerly GrabTaxi – the local competitor that spelled its downfall. This was made public by a joint statement by the two companies just this Monday, March 26. Said announcement played coy with how much Uber offered to Grab for their SEA assets. What is made known however is that under the terms of the agreement Uber Technologies Inc. will receive a 27.5% stake in Grab that will give them a voice in how the company is being run.
It may not seem much right now but Grab officials, especially in their Philippine offices, see only good things happening once Uber’s Southeast Asian operations are sold off to the Singapore-based company. Grab Philippines Country Head Brian Cu spoke of improvements for their partner-drivers and the Filipino customers using Grab’s ride-hailing app. “The combined services of Grab and Uber signals a wider network of TNVS drivers and passengers and improved ridesharing services,” he said. Both Uber and Grab will be cooperating in the smooth migration of Uber users and drivers. This also includes merchant partners signed to Uber’s delivery platform.
Southeast Asia is only the latest in the multiple fronts of the international ride-hailing tech scene where Uber is beating a hasty retreat. Last year, the San Francisco-based company conceded defeat in Russia against the country’s home-grown service Yandex. Like the prospective SEA deal, Uber came out of the agreement with a 37% stake in Yandex. In 2016 Uber also folded in China and sold its assets there to Didi Chuxing. The reason for these reversals was, as Uber CEO Dara Khosrowshahi puts it, “fighting multiple battles against multiple competitors”.
According to Uber, about 500 employees in their Philippine offices are expected to transition to Grab’s business organization. On the larger scale, Grab is also sending a merger notification back home to the Competition Commission of Singapore, to inform government regulators of the ongoing transition.
Photo courtesy of says.com