Uber today announced that it had agreed to sell its Southeast Asia operations in Cambodia, Indonesia, Malaysia, Myanmar, Philippines, Singapore, Thailand and Vietnam to Singapore based Grab and take 27.5% stake of it in the process. Uber app will function in these countries for another two weeks.
Uber has already exited China when it sold its business there to Didi and Russia. The firm is rumored to be considering its options in India as well, although the company claims that it is not planning to exit from other markets.
Here’s an excerpt from Bloomberg (access their piece here):
Under the agreement, Grab will acquire all of Uber’s operations in a region of 620 million people, including food delivery service UberEats. The U.S. ride-hailing behemoth in return gets a 27.5 percent stake in Grab and its chief executive officer will join the board of the Singapore-based company.
For San Francisco-based Uber, pulling out of running its own business in Southeast Asia cuts back on losses ahead of a planned initial public offering in 2019. But the deal marks the latest retreat by the world’s most valuable startup from a rapidly expanding arena: Uber sold its business in China to Didi in 2016 after a battle in which both burned through cash to court drivers and riders with rich subsidies. Uber negotiated a similar move in Russia last year.
Here’s the message that Uber has been sending to customers in Thailand:
Uber was and is the innovator in this field. Grab basically just copied the business model and adopted it for the Southeast Asia market.
Whenever I try to use the Grab in Southeast Asia, it usually ends up in frustration compared to Uber. The Grap app is bad (compared to Uber) and prices, wait times and driver quality often not competitive.
Grab here is basically buying out a competitor so that they can raise prices, offer less incentives for both drivers and riders, and perhaps take higher commission from drivers too. I see myself using regular cabs more often now in Southeast Asia compared to tapping the crap Grab app. Consolidation doesn’t benefit consumers at all.