Ride-hailing firm Grab eyes expansion as it acquires Uber

Share

Uber Technologies Inc. has confirmed plans that it will be selling off its Southeast Asian operations to Grab and in turn it will garner a 27.5 per cent stake in a combined entity.

The companies said that Uber Eats, the food delivery business, will run in Southeast Asia through May and then shift to the GrabFood platform.

When asked if Uber was planning any further deals to unload worldwide operations and hold stakes in competitors, Khosrowshahi said in a note to employees: "It is fair to ask whether consolidation is now the strategy of the day, given this is the third deal of its kind ..." However, the statement did not disclose the value of the deal between Uber and Grab.

In a statement by Grab CEO, Anthony Tan said, "Today's acquisition marks the beginning of a new era".

The agreement is expected to further secure Grab - which now operates in 195 cities across eight Southeast Asian countries - as the region's undisputed leader in the car-hailing business.

Uber and Grab, together with two other SoftBank-backed ride-hailing firms - India's Ola and China's Didi Chuxing - provide about 45 million rides a day, according to SoftBank presentation material in February.

But Grab, which operates in 195 cities in eight Southeast Asian countries, became the dominant force in ride-hailing, leaving its troubled USA rival struggling.

Uber CEO Dara Khosrowshahi will receive a seat on Grab's board of directors.

Uber staff The Straits Times spoke to said that at 10am, hundreds of them were told to pack up their belongings and leave the premises by 12.30pm.

Grab is a rapidly expanding ride-sharing, food delivery and financial services provider in the region.

There will be no changes for existing Grab drivers.

She added that the firm will be talking to more than 500 Uber employees here to see "how they would fit into Grab".

Why Grab? Why not Uber?

The two businesses claim they are now working on the integration of the UberEats merchant, customer and delivery networks in order to minimise disruption while the service is transferred to the GrabFood service.

But the most important point is about the margins on rides hailed across Southeast Asia, which are likely very low.

Share