Uber is officially exiting Southeast Asia. The company agreed to sell the regional business to their local competitor Grab. In Return Uber will receive a 27.5% stake in Grab.
Uber sells their Southeast Asia Business to Grab
Grab has announced Monday, 23 March 2018, it has bought their US rival Uber’s Southeast Asia business, ending the fierce battle for majority market share in the region. In Grabs’ statement it said they are buying Uber’s ride-sharing and food delivery services for the Southeast region. In exchange, Uber is receiving a 27.5 percent stake in Grab.
Grab was last valued at $6 billion. Beyond car and taxi-hailing services, they also have payment platform called GrabPay and have recently launched a financial service platform as well. As a part of the merger Grab will acquire Uber’s food-delivery business, UberEats, in Southeast Asia. Grab will take in 500 Uber staffers over the coming weeks across the region, the Uber customers will have to shift from their Uber apps to Grab, according to an email send to the Southeast staff by Uber CEO Khosrowshahi.
In his email, Khosrowshahi stated that the transaction will the company focus on the core markets such as India, the Middle East and Latin America. It reads as follows;
“It is fair to ask whether consolidation is now the strategy of the day, given this is the third deal of its kind, from China to Russia and now Southeast Asia,” Khosrowshahi wrote. “The answer is no. One of the potential dangers of our global strategy is that we take on too many battles across too many fronts and with too many competitors. This transaction now puts us in a position to compete with real focus and weight in the core markets where we operate, while giving us valuable and growing equity stakes in a number of big and important markets where we don’t.”
According to Khosrowshahi, Uber has invested $700 million in the region,
“These are never easy decisions and I know this will mean a big change for you and your families, but I believe that combining forces with Grab is the right thing to do for Uber for the long term,” he stated.
Uber has existing operations in Malaysia, Singapore, Thailand, Vietnam, Philippines, Myanmar and Indonesia.
Grab has long advertised their hyper-local advantage over Uber. That knowledge of the small differences between the eight countries helped Grab expand beyond car and taxi-hailing and into payments and financial services. This merger shows that Uber recognizes that advantage.
Uber services will be discontinued in Southeast Asia from April 8
Uber will remain available for the next two weeks, until the 8th of April. This is to facilitate the transfer of the Uber drivers with from the Uber platform to the Grab Platform. This means that after the 8th of April Uber will only be available outside of the Southeast Asia region.
The Fare Structure will not change
There will be no change to the fare structure after the merger is complete. Fares for GrabCar and JustGrab will continue to be calculated based on a base distance, with a dynamic surcharge considering factors such as demand and supply, traffic conditions, toll, and estimated time it will take to complete the journey. Passengers that choose the taxi options will continue to pay by metered fares that are set by the respected taxi companies. Fares for other services like GrabHitch or GrabShuttle will remain at the usual fixed amounts.
What happens to all your Uber data?
All account information will remain. Within Southeast Asia Uber users can still view their past trips and ratings in the Uber app, but no longer use the app to order an Uber. Your account will remain active and can be used in any country outside Southeast Asia where Uber operates. Data that has been shared with Uber, except for any payment information, will be transferred to Grab. However, it will not be visible in the Grab app.