Uber to sell South-East Asia business to Grab
CNBC reported this week that Uber and Grab Taxi, South-East Asia’s most successful ride-hailing provider, might come to a deal. Uber would sell the South-East Asian business in exchange for a sizable share in Grab’s operations.
Uber’s CEO, Dara Khosrowshahi, has been heard saying at the Goldman Sachs Technology and Internet Conference in San Francisco, that it’s very difficult competing against strong local players. He quoted Russia and China as examples. In these 2 markets, Uber has already gone through an exercise similar to the one announced with Grab : Uber sold its China business to DIDI for a 20% stake in the company and merged Uber Russia with Yandex in exchange for 37% of the Russian market leader.
Next to the strategic reason of preferring alliances to competition, Uber is also keen to clean up the business and raise profitability after a difficult 2017.
The real winner of the deal however seems to be a name that constantly comes back, SoftBank. The Japanese tech conglomerate is known for investing in future mobility more than any other company. Although keeping away from the headlines, SoftBank is already involved in Grab, DIDI, India’s Ola, Brazil’s 99,… and has shown interest in Lyft, Uber’s largest competitor on the US market – and these are only examples in the ride hailing industry. The Japanese have invested in many tech funds and are looking into building electric vehicles (in collaboration with Toyota and Ola).
For those who have been watching SoftBank’s investments, it has been clear for a while how SoftBank’s web is tightening around future mobility, very much alike Tencent.
Grab (formerly Grab Taxi) has achieved an impressive track record in its short existence : 2.5 million daily rides, over 67 million downloads of the Grab App on Google Play and App Store, 10 different services (GrabTaxi, GrabCar, GrabHitch, GrabBike, GrabShuttle,…). They claim to have an accident rate that is 5 times lower than the regional average in South-East Asia and, important for the Fleet Manager, already 5000 companies have adapted Grab for Work as a corporate solution for employees.
Through their “Driver-Partners”, Grab also gives back to the community, improving digital literacy, giving language classes, starting up GrabSchools and allowing their drivers access to cheap loans and insurance.
The deal between Grab and Uber hasn’t been formally confirmed yet by either party, but is likely to happen very soon. More to follow!