Uber sold its China operations to rival Didi Chuxing in 2016 in a deal worth United States dollars 35 billion.
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Grab will then reportedly expand its food delivery business GrabFood from Indonesia and Thailand to Singapore and Malaysia.
For Softbank, the deal will help it “double down” on its plans for growth and invest in products and technology. Masayoshi Son’s firm is pushing to reduce competition in a Southeast Asian ride-hailing market forecast to reach US$20.1 billion by 2025.
While SoftBank and Didi are big investors in both companies, the deal considered to be huge for Grab, which has about 5 million drivers in 195 cities, recording 90 million downloads of its app and now valued at $6 billion. Grab marked a major milestone past year, completing its one billionth ride in Southeast Asia, with its app now being downloaded in 90 million mobile devices.
In an e-mail to employees post the Grab deal, Khosrowshahi said Uber will get 27.5 per cent stake in the combined company.
“Together with Uber, we are now in an even better position to fulfill our promise to outserve our customers”, Anthony Tan, Grab’s Group CEO and Co-founder, said. Previously Uber sold its China business to Didi Chuxing and merged its Russian Federation operations with tech firm Yandex.
But the most important point is about the margins on rides hailed across Southeast Asia, which are likely very low.
The announcement marks the third time that Uber has ceased operations as a brand in a market. Until then, you can still use Uber Eats or call a vehicle or drive using the Uber app, but these are the grace periods for you to make the move to Grab.
At least for Uber’s investors, this sure beats burning money to subsidise drivers and passengers in a battle to the bottom to gain market share and edge a rival out. Early past year, Didi invested $100 million in US -based Lyft, Uber’s main rival at home. They will also collaborate with governments and public transport operators to link public transport services; creating seamless and integrated multi-modal commuter experiences.
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The deal enables Uber to keep a foothold in the increasingly affluent market of 640 million people while cutting its losses.
