The peer-to-peer ridesharing, food delivery, and transportation network company, Uber has recently agreed to sell its Southeast Asia business to its primary competitor, Grab. The decision was taken after the company sold its business in China to local rival, Didi Chuxing in 2016 due to a further retreat from the international operations.
As per reports, Uber will keep a 27.5 percent stake in the Singapore based ride-hailing company. Furthermore, Uber’s chief will also get involved in Grab’s board. The deal’s value has not been publicized, but it will include the sale of all Uber’s operations including its food delivery service.
As Grab being one of Southeast Asia’s most popular taxi company that operates in eight nations including Singapore, Malaysia, Indonesia, and Vietnam, this contract is believed to a victory for both the rival companies.
Competition in the Taxi service sector has been very rapid which eventually resulted in discounts and promotions being offered to the riders and hence, it has reduced the profit margins for the drivers. But solidification in the industry was expected after Japan’s Softbank Group made a huge investment in Uber earlier this year. This was done for strengthening the industry and to improve the revenues.
“The firm wanted to become more relevant to users' everyday lives and planned to expand its food delivery service”, Grab's boss said in an interview with a news channel.