Uber Backs Out Of Southeast Asia, Selling To Regional Rival 'Grab'

Grab will purchase Uber's ride-hailing and food delivery operations in Southeast Asia in a deal valued at several

For Grab, competition remains in Southeast Asia with Indonesia's Go-Jek, which is a US$5 billion start-up backed by big names such as Google and Tencent.

Grab said Monday that Uber will take a 27.5 per cent stake and a seat on its board as part of the deal.

The Land Public Transport Commission (SPAD) will cooperate with government agencies such as the Malaysia Competition Commission and relevant non-governmental organisations to ensure the rights of consumers are protected following the Uber-Grab merger in Southeast Asia.

The move will free up capital to execute on Uber's growth plans in core markets like North America, Latin America, India and Europe and invest in engineering and product development, they said.

However, the Competition Commission of Singapore (CSC) stated that it has not received notification of the merger, reminding that along with Singapore's competition laws, it prohibits mergers that may result in a "substantial lessening of competition", the Singapore's Straits Times reported.

It marked another retreat from the Asian market for the US-based firm after it withdrew from China in 2016 via a deal with Chinese player Didi Chuxing. One path towards profitability is expanding to markets where there is high-demand for ride-hailing services.

Competition between ride-hailing apps has been heating up in Southeast Asia, with the market forecast to grow more than five times to Dollars 13.1 billion by 2025, according to a 2016 report by Singapore sovereign wealth fund Temasek.

The latest deal, as well as an initiative previous year to offload its Russian operations, makes it clear that Uber is now focusing on improving its finances rather than global expansion.

Uber, which is preparing for a potential initial public offering in 2019, lost $4.5 billion past year and is facing fierce competition at home in the United States and across Asia, as well as a regulatory crackdown in Europe. The deal with Grab is the first operations sale by Khosrowshahi, who started in September. However, the CEO opposed about the consolidation and it was the strategy of the day. "The answer is no", Khosrowshahi said in a note to employees that was shared with Reuters.

SoftBank is also an investor in India's Ola, another competitive and costly market where rivals have heavily subsidised rides in an effort to gain market share.

She added that they have consolidated hearings for proposed fare hikes by both ride-hailing firms on April 3, five days before the Uber app will no longer be of use in the country.

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