Industry > Business

Is Grab about to buy Uber’s Southeast Asian operations?

If true, this would be a case of David vanquishing Goliath

Rumors are getting louder that Uber could soon throw in the ride-sharing towel in Southeast Asia, with news making the rounds that its main competitor Grab is in talks to acquire the US company’s assets in the region. Uber is denying the story, but a look at the facts shows why such a move wouldn’t be overly surprising.

The main basis for the rather persistent rumors that the Singapore-based startup might be about to go all David on the American Goliath is the fact that Japanese tech conglomerate SoftBank recently invested more than $7 billion in Uber, making it the latter’s largest shareholder with a 15% stake in the business. SoftBank also happens to be the largest shareholder of Singapore-based Grab, and on top of that holds huge stakes in India’s Ola and China’s DiDi Chuxing. In 2016, Uber ceded its China operations to DiDi Chuxing, and the company’s new Japanese paymasters may well tell the board to concentrate on other markets such as Europe and the USA, while using Grab to continue the domination of the ride-sharing landscape in Southeast Asia.

Grab has been running circles around its competitors in Southeast Asia for a while now, while Uber has suffered some setbacks in recent months

Grab only started off in 2013—the same year Uber launched in Singapore—but has been outperforming many of its competitors ever since by spending considerable time and effort to better understand the local needs of travelers in its various markets and adjusting the business model accordingly. As a result, the company has seen an almost meteoric rise and currently claims to be the leader in ride-hailing services in the region, having completed over one billion rides in the over 160 cities it operates in, and chalking up an impressive valuation of more than $6 billion.

Uber is currently valued at $68 billion, but figures alone often don’t tell the whole story in the tech industry. And this wouldn’t be the first time that a market leader is overtaken and defeated by a much smaller disruptor. Grab has been running circles around its competitors in Southeast Asia for a while now, while Uber has suffered some setbacks in recent months, not least the temporary suspension and hefty fine in the Philippines after it fell afoul of LTFRB regulations.

Whether this means Grab will have the ride-sharing monopoly in Metro Manila (which would not necessarily be a good thing) remains to be seen. For now, let the Grab-versus-Uber debate begin.

Frank Schuengel

Frank is a German e-commerce executive who loves his wife, a Filipina, so much he decided to base himself in Manila. He has interesting thoughts on Philippine motoring. He writes the aptly named ‘Frankly’ column.