Uber is ceasing services on Southeast Asia, as the transport giant company proceeds to merge with local market rivals across the region. According to CEO Dara Khosrowshahi in a mail sent to staff, Uber’s merging with Grab means that Uber will get 27.5% stake from the newly combined firm, which is currently considered to have a value of $6 billion.
This deal has proven to be a win-win situation for Uber and Grab, considering their statement on the investment made by the American transportation firm, which read that there was a $700 million investment in South East Asia in the past five years.
Uber’s history of misses across the world
This deal will provide Uber with $1.6 billion out of Grab’s $6 billion earnings, with Grab taking over the transportation service market entirely now that Uber won’t be around any longer. With 500 staff members and former Uber customers, Grab will also be adding features like Uber Eats to its services.
The rumor goes along the lines of Uber having its main investors, SoftBank, advising their business moves since pulling out of different countries has become common for Uber. This happened before with Uber merging with Didi Chuxing and pulling out of China, followed by their withdrawal from Russia through another merger with local rivals Yandex.
It is rumored that Softbank has advised the company to maintain its services where it remains somewhat of a game changer, limiting and focusing the improvement of its services in more Western culture regions such as Australia, Europe, and the Americas since these regions have been serving as “core markets”.
This deal will provide Uber competitors with several commodities, especially when it comes to the fact that Grab won’t have to be concerned with their biggest rivals, who happen to have an international presence. This combination will allow Grab to take full control of some services that used to be exclusive to Uber, in addition to the ones that the now Singapore-based firm offers.
What is Grab and where did it come from?
Regardless of the winners and losers issue that tends to circle this news, it must be noted that Grab is no underdog. Grab started out providing simple services in Malaysia and now it has expanded and relocated to Singapore in only 2 years of remarkable growth. Nowadays, Grab provides more than 10 transportation alternatives ranging from bicycle sharing and bicycle taxis to private cars and taxis.
Grab has recently expanded to a standard service in transport provider companies, making it available to customers to pay for several different services such as food and other goods through the company’s new payment method GrabPay.
Source: TechCrunch