Uber, arguably the most dominating taxi service around the world, has been facing numerous problems in Southeast Asia and they are winding up their operations in the region.
Uber is selling its business to one of its main competitor Grab that has been proving a potential rival to Uber all the way since the laugh of the later. Grab is growing incredibly fast in Southeast Asian rides-haring, financial and food delivery services business.
Now Grab is taking over Uber’s ride-hailing business and has expanded its operations in eight countries. This deal has been finalized in an exchange as Uber will have a 27.5 percent stake in Grab. Furthermore, the CEO of Uber Dara Khosrowshahi will also become a member of Grab’s board.
With a considerable population of over 600 million people, Southeast Asia is seen as a growing market where a large number of people have started using internet and online world for the first time.
However, it is also considered as a market that has brought huge losses to some new industries including ride-sharing. The major reason behind this loss is the nail-biting competition where companies offer subsidies to the clients to gain popularity.
An early investor in Grab, SoftBank, backed Uber in January by making an investment and now the consolidation has been strongly rumoured because of the same investor in both companies. However, according to experts, Uber failed to handle its operations effectively and couldn’t find any other way but to surrender against Grab that will now be a leading company without a strong competitor in the market.
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