Grab acquires rival Uber’s South East Asia operations, furthering the latter’s retreat from international waters. The Singapore-based firm, known primarily for its taxi-hail service, purchased all Uber service operations, including food delivery. Both companies regard the deal as mutually beneficial, with Grab Chief Executive Anthony Tan calling it the “beginning of a new era.”
Grab vs Uber: Consolidation Between Business Rivals
While the value of the deal has not been made public, it is known that Uber will retain a 27.5 percent equity in the company. According to a report by BBC, Uber Chief Executive Dara Khosrowshahi said the present deal is “a testament to Uber’s exceptional growth across South East Asia over the last five years.” The move is the latest in a string of equity deals following agreements with China’s Didi in 2016, and Russia’s Yandex in 2017.
The deal is widely believed to be the direct result of the two companies sharing common investors. Competition between Grab and Uber has led to lowered revenues. Khosrowshahi explained his company’s exit saying Uber’s ventures in Asia will not be “profitable anytime soon.” This has led investors Didi and Softbank to push for consolidation between the two rivals.
Grab Solidifies Control Over SEA Region
The business deal between the two firms will open up new avenues for Grab. Grab has previously stated their desire to provide more value to their consumers, especially with regards to their food delivery system.
“We want to be that app that allows you to buy your coffee, earn your rewards and then after that, you want to buy your lunch and order in, have your food delivered so you don’t have to go through the traffic jam,” said Anthony Tan in an interview with the BBC last February.
According to a statement given by the company, GrabFood delivery services will expand to four countries by the end of next quarter.