By AFP and Alexandria San Juan
Uber sold its Southeast Asian business to rival Grab on Monday, ending a bruising battle between the ride-hailing behemoths and marking the US firm’s latest retreat from international markets.
Singapore-based Grab is taking over the ride-sharing and food delivery operations of Uber in the region, with the California-headquartered company to receive a 27.5 percent stake in the business in return.
Grab Philippines (GrabPH) country head Brian Cu, in a statement on Monday, said the two biggest ride-hailing firm in the country have “come together” to serve the Filipinos better, adding that this was an important milestone in the ridesharing industry.
“The combined service of Grab and Uber signals a wider network of TNVS (transport network vehicle service) drivers and passengers and improved ridesharing services,” Cu stated.
With the sale, Cu said that there will be a larger fleet of drivers on their platform which means that passenger transportation needs will be met faster.
“Passengers will get to enjoy shorter waiting time, more convenient and affordable rides through one platform,” he added.
More jobs, less waiting time, and an “ultimately higher earning potential” are expected to be felt by Grab’s partner-drivers as more passengers are expected to use their platform, Cu said.
The sale is Uber’s latest withdrawal from a market where it had faced tough competition, as new chief executive DaraKhosrowshahi seeks to stem huge losses and move past a series of scandals.
After a fierce battle, Uber sold its China operations to rival DidiChuxing in 2016 in return for a stake, and last year the US firm merged in Russia with the taxi-hailing app of internet giant Yandex.
The deal with Grab – which operates in eight Southeast Asian countries, including the Philippines– is similar to the one struck with Didi, and ends a fight for market share in a region that is home to some 650 million people and an increasingly affluent middle class.
“Today’s acquisition marks the beginning of a new era,” said Grab chief executive Anthony Tan. “The combined business is the leader in platform and cost efficiency in the region.”
Khosrowshahi, who is joining Grab’s board as part of the agreement, said: “This deal is a testament to Uber’s exceptional growth across Southeast Asia over the last five years. It will help us double down on our plans for growth.”
The value of the deal, which Grab said was the largest ever acquisition by a Southeast Asian Internet company, was not disclosed.
Grab has long been the dominant force in ride-hailing in Southeast Asia and speculation mounted that a deal with Uber was on the cards after Japanese financial titan Softbank invested huge sums in the US firm.
Softbank is also a major investor in Grab, and is known for pushing for consolidation in the global ride-hailing industry, which has been losing billions of dollars a year due to turf wars.
‘Fewer choices for commuters’
As part of Monday’s deal, Grab is combining Uber’s food delivery service in the region with its own and plans to expand it to more countries.
While both sides said the move would benefit customers, analysts raised concerns a lack of competition could push up prices.
“Industry consolidation will mean fewer choices for commuters and fares are likely to trend higher over time as the remaining players seek to improve their profitability longer term,” Corrine Png, a transport analyst from Singapore-based research firm Crucial Perspective, told AFP.
The GrabPH head also emphasized that they are very excited to welcome Uber drivers to their family and have extended their “full support and resources in this time of transition.”
“Our partnership with Uber will fuel our drive and passion for a better transport future even more. We will continue to work and collaborate with the Department of Transportation (DOTr), Land Transportation Franchising and Regulatory Board (LTFRB), local government units, and other stakeholders to constantly find ways to improve our services,”Cu added.
Meanwhile, LTFRB member lawyer Aileen Lizada said they will continue to regulate the fare structure and monitor for the benefit of the riding public.
A consolidated hearing on fare hike petitions on both TNCs still to be resolved by LTFRB on April 3.