SINGAPORE -- U.S. ride-hailing company Uber Technologies is reportedly set to sell Southeast Asian operations to Grab, in effect ceding the region to the already dominant force after a long and bruising fight.
The sale could be announced as early as Monday, Bloomberg reports. Uber could receive a stake in Singapore-based Grab in exchange, providing continued exposure to the Southeast Asian market.
Uber has sought to compete with Grab through alliances with such partners as ComfortDelGro, Singapore's largest taxi operator, and Thai cab company Howa. But it has remained locked in a war of attrition with Grab for customers and drivers.
Uber CEO Dara Khosrowshahi, who took over from founder Travis Kalanick last summer, has been cutting costs and restructuring unprofitable businesses with an eye toward an initial public offering as early as 2019. The sale of Uber's Southeast Asian operations will let the company concentrate on more profitable markets. Recent years have seen news of deals to sell Chinese operations to peer Didi Chuxing and to merge its Russian business with ride-hailing operations of internet company Yandex.
Japan's SoftBank Group may have played a role in the Grab deal. A $2 billion investment in Grab by SoftBank and Didi was announced last July. The Japanese technology conglomerate also took a 15% stake in Uber more recently, becoming the American company's largest shareholder. SoftBank could use its position to push for further consolidation.
Founded in Malaysia in 2012, Grab now has a presence in eight Southeast Asian countries. It has used the large customer base built up through its car- and motorbike-hailing services to expand into food and package delivery as well as payments.
This strategy of rapid expansion has helped Grab achieve a $6 billion valuation in just six years. It is exemplified by the company's new GrabVentures division, which chief Reuben Lai calls a startup within a startup. GrabVentures announced a platform for bicycle-sharing services on March 9.
For Grab, which is well aware of the profits that can be gleaned from early domination of a market, the chance to buy its competitor's Southeast Asian business was likely too good to pass up.