When LTFRB announced the temporary suspension of the two of the biggest transportation apps in the Philippines, a lot of people felt devastated and angry. After all, these two apps are very useful in the everyday lives of people, especially those who are working in the top business cities of the country.
Surprising Turn of Events
In a surprising turn of events, Grab, the dominant ride-hailing service in Southeast Asia is close to finalizing a deal to acquire its competitor, Uber Technology Inc.’s business. It is rumored that Uber will sell its regional operations to Grab. In return, Grab will also sell a stake in its company to the rival company. Uber will buy as much as 20% of the stocks of Grab. The two parties may sign a deal this week or by next week.
Uber’s Agreement With Didi Chuxing
This agreement may be similar to the deal that Uber had with another Chinese ride-sharing company, Didi Chuxing, back in 2016 when the San Francisco-based company sold its China operations to Didi Chuxing in exchange for a stake in their company.
According to people familiar with the talks, Grab is currently in discussion with its existing backers, which include SoftBank Group Corp., and its new investors for additional capital. CB Insights stated that Grab is most recently valued at $6 billion.
For Anthony Tan, Grab’s co-founder and Chief Executive Officer, this truce would bring to an end the bruising battle for leadership when it comes to the fast-growing ride-hailing market in Southeast Asia.
Meanwhile, Uber’s new CEO, Dara Khosrowshahi, has been pushing to clean up the financials of the company in preparation for another public offering by 2019. By pulling out of markets, like in Southeast Asia, it would boost the profits of the company to as much as $10.7 billion. After his trip to Asia last month, Khosrowshahi mentioned that he is committed to key markets in countries such as Japan and India.
A Gentle Push From Softbank?
In January, Japan’s Softbank became the largest shareholder in Uber. Rajeev Misra, a Softbank executive who joined Uber’s board suggested in an interview that Uber should focus on core markets like the United States, Latin America, Europe, and Australia.
Grab, which has more than 81 million mobile app downloads, is currently offering services in more than 178 cities across Cambodia, Indonesia, Malaysia, Myanmar, the Philippines, Singapore, and Thailand.
What can you say about it? Do you think this will help improve the services of the ride-hailing apps?