Grab takes over Uber's Asia-Pacific operations

New hires relax at a lounge area in a Grab office in Singapore Sept 23 2016

Grab is aiming to become South East Asia's biggest food delivery service, and the brand will now take over Uber's operations in Cambodia, Indonesia, Malaysia, Myanmar, the Philippines, Singapore, Thailand and Vietnam.

Margins are notoriously low on ride-sharing services in Asia, where such firms rely heavily on discounts and promotions, according to Reuters.

In a statement to the media, Grab said Uber employees were being placed on paid leave. Previously Uber sold its China business to Didi Chuxing and merged its Russian Federation operations with tech firm Yandex.

Despite the ongoing rumors, Uber itself continually denied that talks were underway, with Khosrowshahi even going as far as to say February 22 that Uber would continue to invest in Southeast Asia. "The combined business is the leader in platform and cost efficiency in the region", Grab chief executive Anthony Tan said.

And, according to the Financial Times, the deal could pave the way for a similar departure in India, where Uber has met with fierce competition from local rivals Ola.

As far as Uber is concerned, the pull out from the region could help it cut losses ahead of a planned initial public offering in 2019.

Following the deal, Grab said it will also expand its food delivery services "Uber Eats" apart from its cab services across eight countries.

He also denied consolidation is the "strategy of the day", given this is the third deal of its kind, from China to Russian Federation and now, Southeast Asia. This is the third such deal that Uber has inked after struggling to compete in some key markets so many have understandably been concerned whether the company is going to make this a habit.

Softbank, which recently pumped in over a billion dollars into Uber reportedly pushed for consolidation to improve the profitability of the San Francisco-based ride hailing major.

In exchange, Uber will receive a 27.5% stake in Grab's business, a figure which Grab calls "reflective of the companies' respective market shares."?

The next stage of growth for Grab, the building of a Southeast Asia leading online-to-offline mobile platform, is now a possibility with the acquisition of Uber's services in the region... Misra made the remarks shortly after becoming an Uber board member as part of the SoftBank investment.


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