Uber to exit Southeast Asia, after quitting from China, Russia
26 March 2018
Embattled ride-hailing giant Uber, which has already backed out of China and Russia, is now all set to exit from the Southeast Asian market by selling its operations to a Singapore-based rival.
The move is believed to be part of a strategy by Japanese telecom group SoftBank Group Corp, which has a significant 15-per cent stake in Uber (besides major investments in Grab as well as Ola in India), and China’s Didi, one of the largest ride-sharing operators, to gradually capture the global market.
Grab and Uber are expected to come out with an announcement anytime now on the latter’s exit from Southeast Asia, a combined market of nearly 650 million consumers, virtually surrendering its share of the market to Grab.
With services in nearly 200 cities across Southeast Asia, Grab has about 90 million mobile app downloads and is growing rapidly in the region.
According to sources, Uber has virtually written off Southeast Asia and its new CEO Dara Khosrowshahi, appears to have dropped it as a major market for the company. Khosrowshahi has publicly said that his focus is on India and Japan.
But analysts say that he should be worried about these two markets as well, and even the rest of Asia. Uber might ultimately find itself out of the continent, succumbing to the likes of Didi, Grab and Ola. The Indian company has already ventured into Australia and with SoftBank’s solid banking, could look at expanding to other Asian markets.
In fact, SoftBank Group has urged Uber to focus on the US, Latin America and Europe, reflecting its strategy of allowing the other Asian companies to consolidate their strengths in the region.
Of course, Uber has given up control of some of the markets in exchange for a stake in the new ventures. This would possibly help Uber in its planned IPO next year.