Uber Technologies Inc. has agreed to sell its Southeast Asian ride-hailing business to its Singapore-based regional rival Grab, according to the statement of the companies on Monday.
The agreement will see Grab merging with all of the operations of Uber in Southeast Asia as well as Uber Eats with its own operations.
Meanwhile, the ride-hailing company will acquire a 27.5 percent stake in Grab and Dara Khosrowshahi, CEO of Uber, will be joining the firm’s board.
According to Grab, it will expand its food delivery business, GrabFood, to Singapore and Malaysia after merging with Uber Eats.
Uber’s app will run for another two weeks to give its drivers some time to move onto the Grab platform. The Uber Eats, on the other hand, will continue until the end of May.
According to the email of Khosrowshahi to Uber employees, the ride-hailing company is not on a consolidation path.
“It is fair to ask whether consolidation is now the strategy of the day, given this is the third deal of its kind, from China to Russia and now Southeast Asia. The answer is no,” stated Khosrowshahi.
“One of the potential dangers of our global strategy is that we take on too many battles across too many fronts and with too many competitors,” he added.
Khosrowshahi explained in his email that the agreement with Grab puts Uber in “a position to compete with real focus and weight in the core markets where we operate, while giving us valuable and growing equity stakes in a number of big and important markets where we don’t.”
There are nearly 500 Uber employees in Southeast Asia who will be moving to Grab. Meanwhile, some staff would remain part of Uber’s Asia Pacific operations, according to a spokesperson of Uber.
Uber Eats to Expand Business to Over 100 Cities
Uber Eats, the food delivery service of Uber, will be expanding to over 100 cities throughout Europe, Africa, and the Middle East.
Among the several new locations that Uber Eats is entering, it will also be launching in Kenya, Ukraine, Romania, Egypt, Ireland, and Czech Republic.
Uber Eats is a food deliver service that aims to assist customers in obtaining food from local restaurants. With its app, the food deliver service connects the consumer with a variety of local restaurants.
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