Uber sold its Southeast Asian business to Grab
Ride-hailing giant Uber has been facing stiff global competition from local rivals. The company has already folded its businesses in China and Russia, leaving these markets to Didi Chuxina and Yandex (YNDX), respectively.
Now, Uber has agreed to sell its operations in Southeast Asia to Grab, a local ride-hailing company. Grab is taking over Uber’s operations in eight Southeast Asian countries as well as Uber Eats, which operated in three of those countries. In exchange, Uber would receive a 27.5% stake in Grab. The region is often seen as a growth market for Internet companies, as it has a population of ~600.0 million.
Why Uber sold its Southeast Asian business
Uber decided to leave Southeast Asia due to losses from increased competition in the region. Stake owner SoftBank has encouraged the ride-hailing company to focus on Europe and the US.
Uber has seen its losses rise over the years, as it has been offering discounts to users and bonuses to drivers to compete with its local rivals around the world. The losses have been more prominent in Asia.
Uber is consolidating under the leadership of Dara Khosrowshahi after it had a tumultuous year. The company seeks to cut its expenses as it gets ready for a much-anticipated IPO in 2019.