Ride-hailing giant Uber is preparing to sell its business across Southeast Asia to local rival Grab.
The move follows the US firm’s retreat from China and Russia and comes as new chief executive Dara Khosrowshahi attempts to turn its fortunes around.
Under the terms of the deal announced today (Monday, March 26), Uber will take a 27.5 per cent stake in Grab, which operates ride-sharing, food delivery and financial services businesses. Uber will also take a seat on Grab’s board.
As well as the Philippines, Grab — formally known as GrabTaxi — operates in Singapore, Indonesia, Malaysia, Thailand, Vietnam, Burma and Cambodia. Last year alone, it handled more than a billion transactions.
Chief executive and co-founder Anthony Tan, a graduate of Harvard Business School, said the Uber deal “marks the beginning of a new era” in using mobile businesses to provide an array of services.
Grab said it plans to expand its food delivery business to Singapore and Malaysia after integrating it with Uber Eats.
The company also plans to expand GrabCycle for shared bicycles and “personal mobility devices” and is planning GrabShuttle services for on-demand bus routes.
Uber drivers will switch to the Grab online platform and the Uber app will stop working in Asia in two weeks.
The American firm has had a rocky time operating in the Philippines. In August we reported how it was banned from Manila for one month amid a crackdown on unregistered drivers. This was overturned after it paid nearly $10 million to get back on the road.
In China, Uber has sold off its local business to competitor Didi Chuxing, also taking a stake in the Asian firm. In Russia, it agreed to merge its ride-hailing business in the country with local player Yandex.
In a statement announcing today’s deal, Tan said: “We are humbled that a company born in Southeast Asia has built one of the largest platforms that millions of consumers use daily.”