According to reports, Uber is preparing to sell its Southeast Asian business to Singapore based Grab in exchange for stake in the latter.
Uber x Grab
It looks like Uber is throwing in the towel in its business in Southeast Asia. In a report by CNBC, the ride-sharing business is preparing to sell its Southeast Asia unit to Singapore-based Grab, in exchange for a stake in the latter who has a bigger presence in the region.
Apparently, this isn’t the first time this has happened. Uber made a similar deal when it was unable to compete against Didi in China. They sold their Chinese business to Didi in August 2016, in exchange for equity.
The move makes sense for Uber. To remain profitable in areas where it is losing against dominant players, having some equity those companies allows them to cash-in on the growth and successes of “competitors.”
Dara Khosrowshahi, Uber’s curent CEO, mentioned at the Goldman Sachs Technology and Internet in San Fransisco, that competing against local players are harder than what was expected.
“I think the team ran through an inventory of where we competed, and if we compete on let’s say even on a dollar-for-dollar basis against the local player, paying the same amount to drivers, collecting the same amount from riders, in general where we are now is, if both players are kind of spending equally we tend to win share. We’ve got a better brand, we’ve got better technology, better network, etc. Whatever it is, we tend to win share,” said Khosrowshahi. “There’s certain markets, China and Russia, where that wasn’t true. And if your only competitive advantage, or the only reason you can be in a market is because you can spend money, that’s not exactly a reasonable proposition.”
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[Source: CNBC; Via: TechCrunch]
