After weeks of speculation, Uber finally confirmed today that it’s going to merge its Southeast Asia business with local rival Grab in exchange for a significant stake in the company. This is the third such deal that Uber has inked after struggling to compete in some key markets so many have understandably been concerned whether the company is going to make this a habit. Uber CEO Dara Khosrowshahi has said that this is the last such deal.
Uber’s first such deal was with Didi in China. After failing to compete with the local rival, it decided to sell its business to the competitor in exchange for a stake back in 2016. Uber then signed a similar deal with Yandex in Russia just last year.
Earlier today, Uber confirmed that it’s bowing out of the Southeast Asian market and that it has sold its ride-hailing business as well as the Uber Eats division to Grab. However, this will be the last deal of its kind. Khosrowshahi has promised employees that consolidation isn’t going to become the company’s strategy going forward.
“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. This transaction now puts us 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,” he added.
However, some might struggle to take Khosrowshahi’s words at face value, particularly given the fact that he said just a few weeks ago that Uber was going to invest heavily in Southeast Asia to better compete against Grab even though reports at that time suggested that it was in talks for a deal.