Logo of Phnom Penh Post newspaper Phnom Penh Post - Uber sells Southeast Asia assets to rival Grab

Uber sells Southeast Asia assets to rival Grab

Transport Minister Sun Chanthol stands next to a Grab car at the company's Phnom Penh launch event in December.
Transport Minister Sun Chanthol stands next to a Grab car at the company's Phnom Penh launch event in December. Hong Menea

Uber sells Southeast Asia assets to rival Grab

Updated: 6:41am, Tuesday March 27, 2018

Ride-hailing platform Grab announced on Monday that it had acquired the Southeast Asia operations of its US-based rival Uber, including the company’s ride-hailing services in Cambodia, just three months after it officially launched in the Kingdom.

In exchange, Uber will take a 27.5 percent stake in Grab and its CEO, Dara Khosrowshahi, will join Grab’s board of directors as part of the deal, according to a press release from Singapore-based Grab.

Wee Tang Yee, Grab’s country head in Cambodia, said that Uber’s services in the Kingdom will continue for a two-week transitional period as Grab seeks to transfer employees and drivers onto its own platform.

“Grab and Uber are working together to promptly migrate Uber drivers and riders, merchant partners and delivery partners to the Grab platform,” he said in an email. “The Uber app will continue to operate for two weeks to ensure stability for Uber drivers, who can find out how to sign-up to drive with Grab online.”

Founded in Malaysia in 2012, Grab now operates in eight Southeast Asian countries. It launched services in Phnom Penh in December, three months after Uber became the first international ride-hailing platform to begin operations in Cambodia.

Grab’s acquisition of Uber had been rumoured for several months, and its entry into Cambodia was largely viewed as more successful than Uber’s, despite the US firm’s three-month head start.

Since its launch in December, Grab has added a motorbike taxi service and launched a preliminary tuk-tuk service in the capital, while also racking up several agreements with government and development agencies. Uber remained relatively static during the same period.

Multiple Uber regional representatives – including Krittiyawadee Pongpanich, Uber’s Thailand-based head of communications, and Chris Brummitt, Uber’s Asia-Pacific head of corporate and product communications – declined to comment on Monday.

Pascal Ly, who was hired as the general manager for Uber in Cambodia in January, said in an email on Monday that he was no longer able to speak on behalf of Uber or Grab, and would “prioritize my focus on the team to know what will be the next step for them”.

That next step could be working for their one-time rival.

“All Uber employees, including ones in Cambodia, will receive offers to join Grab,” Yee said on Monday. “As we onboard Uber passengers and drivers onto the Grab platform, there will be more passengers using Grab, which will mean more jobs, less waiting time, and ultimately more earnings for our driver-partners.”

Yee predicted that the acquisition of Uber’s operations would gradually lower fares for riders, which could mean increased competition with local ride-hailing platforms.

Homegrown ride-hailing startups, such as PassApp and ExNet, have so far been able to offer lower prices than Uber and Grab, but they could face increased pressure as Grab’s prices fall.

Food delivery, another industry that’s currently dominated by local businesses, could also feel the squeeze from Grab in the near future. Grab’s Monday announcement said the company plans to expand its food delivery services to all Southeast Asian countries, including Cambodia, in the next few months.

“We will rapidly and efficiently expand GrabFood into all major SEA countries in the next quarter,” Grab co-founder Tan Hooi Ling says in the release. “GrabFood will also be another great use case to drive the continued adoption of GrabPay mobile wallet and support our growing financial services platform.”

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