Three takeaways from Uber's Southeast Asia exit

Three takeaways from Uber's Southeast Asia exit

Starting in April, Uber's ride-hailing and food delivery businesses will be swallowed by Grab in eight markets across Southeast Asia, including Cambodia, Indonesia, Malaysia, Myanmar, the Philippines, Singapore, Thailand and Vietnam. As part of the acquisition, Uber will take a 27.5% stake in Grab and Uber CEO Dara Khosrowshahi will join Grab's board.

Grab has always 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 United States firm.

Grab has been seeking to dominate the regional market for auto and motorbike hailing and has expanded into other areas, recently announcing plans to partner with a Japanese credit card company to provide credit to millions of people without bank accounts.

Uber invested $700 million in its Southeast Asia business.

This is the third exit by Uber, following Russian Federation and China.

On Monday, more than 500 Uber employees in the region were put on paid gardening leave for up to three months while Grab explores opportunities for them that best fit "their skills and experiences". Hence, it prompted more Uber drivers to move over to Grab.

"Uber and Grab used to compete with each other by giving more incentives to drivers to forge loyalty with their drivers to operate in their e-hailing platforms", he said.

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"Today's acquisition marks the beginning of a new era", said Grab chief executive Anthony Tan.

The Competition Commission of Singapore (CCS) said that Singapore's competition law prohibits mergers "that may be expected to result in a substantial lessening of competition", according to a Business Times report.

This comes after Uber on Monday, March 26, announced that it sold its operations in Southeast Asia to Grab.

However, following a similar merger between Grab investor Didi Chuxing and China's Uber business in 2016, driver numbers dropped dramatically as subsidies lapsed and new regulations raised residence requirements for drivers.

Ride-hailing companies throughout Asia have relied heavily on discounts and promotions, driving down profit margins.

Khosrowshahi has already begun to narrow Uber's losses, shifting the company's strategy from growth-at-all costs to a more measured, pragmatic approach. Grab believes that every Southeast Asian should benefit from the digital economy, and the company provides access to safe and affordable transport, food and package delivery, mobile payments and financial services.

Azliza also said that when the Greenlight Hub was launched on March 14, Uber Malaysia employees had cited its investment in the Petaling Jaya facility in refuting speculations of the potential buyout. The company has no plans to take a minority stake in any other global markets and will continue to invest in its core markets overseas, including India, the Middle East and Latin America, the person said.

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