Uber is planning to sell its Southeast Asia division to its competitor, Grab. However, no deal has been reached yet.
Grab claims to have 95 percent market share in Southeast Asia and has announced its plans to raise more than $2.5 billion from SoftBank and other investors in 2017. The company operates in more than 100 cities across Southeast Asia, including the Philippines.
This move is alike to Uber’s strategy in China wherein the company sold its ride-hailing operation to Didi for 20 percent ownership, as well as in Russia where the company combined its local business with Yandex’s ride-hailing business for a 37 percent share.
According to sources, the company’s objective is “to reel in its costs in preparation for an IPO” as soon as next year.
Uber’s tie-up with Grab would play into SoftBank’s efforts to exert greater control over the global ride-sharing market. SoftBank also owns shares in Grab, Didi, Ola (India), and 99 (Brazil), and is eyeing interest in Lyft, Uber’s main rival in the US.
“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. 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,” said Uber CEO Dara Khosrowshahi.