Ride-hailing giant Uber seems to have conceded defeat against its rival Grab in Southeast Asia. The San Francisco-headquartered company is preparing to sell its Southeast Asia business to the Singapore-based company in exchange for a sizable stake, a CNBC report said.
Grab operates in private car, motorbike, taxi and carpooling services more than 100 cities across seven countries including Indonesia, Malaysia, the Philippines, Singapore amongst others in Southeast Asia, where it claims to have 95 percent market share.
The development, however, comes months after Grab raised $2.5 billion from Softbank and Didi Chuxing in July last year.
The deal clinched by Grab was aimed at outrunning Uber in the Southeast Asian market.
Uber has already lost the market in China when Didi Chuxing bought Uber’s China business for $35 billion deal in 2016.
The San Francisco-headquartered company, which once emerged as the biggest player in the ride-hailing segment, is gradually losing the market across the continents.
Last month, Chinese ride-hailing platform Didi Chuxing acquired a ‘controlling stake’ in Brazil’s ride-sharing startup 99. Didi bought the majority stake in Brazilian startup, in a deal that values 99 at $1 billion.
The acquisition of a controlling share in 99 by the Chinese company has intensified Didi’s global rivalry with Uber, especially in Latin America. Didi is also planning to enter into Mexico this year alongside expanding into the other Asian markets, most recently expanding into Taiwan through a franchising model.
Besides, Uber has also lost the market in Russia when it agreed to cede its business to Russian competitor Yandex last year with $3.7 billion merger agreement. Yandex is also planning to expand its operations in other Eurasian markets such as Kazakhstan, Azerbaijan, Armenia, Belarus, and Georgia.
Is Grab planning to enter India?
Last month, Singapore-based Southeast Asian ride-hailing major Grab acquired payment company iKaaz for an undisclosed amount. With this acquisition, the Softbank-backed company plans to expand its digital payments platform GrabPay.
Following the acquisition iKaaz team joined Grab’s research and development unit in Bengaluru. iKaaz offers mobile payments platform for enterprises in emerging markets to enable them to extend cashless transactions to their customers.
Importantly, Grab started working on a payment platform GrabPay in July 2016. It had opened R&D center in Bengaluru for the same purpose. The company believes that offering digital payment services can give it an upper hand in Southeast Asia’s ride-hailing market.