EARLIER rumors that came true is the announcement of the sale of Silicon-Valley-famous Uber’s ridesharing and food delivering service in Southeast Asia to Grab, a Singapore-based company doing similar business whose strongholds are, of course, in SEA.
Since March 26, 2018 – Grab posted such official announcement on its Thai Facebook page ( https://www.facebook.com/GrabTH/posts/2071762133042207:0 ) letting the public knows of the news.
“We’d like to share some exciting news with you! Uber will be joining Grab in Thailand and across Southeast Asia, as part of our platform. We can’t wait to better serve the millions of riders, driver-partners and communities we call as one family, in the places we call home.
“You may have some questions about what this means for you. Find out more at grab.com/th/comingtogether,” said the announcement.
For the existing drivers, Grab has also notified them with instructions that they, as well as the riders in Thailand and Southeast Asia, should make the transition from Uber to Grab before April 8, 2018 (meaning – time to switch to Grab app). Uber app in other 80 countries around the world still works fine.
Though it might sound like Uber has lost the battle here, it can also be viewed as a win-win-win situation for the three players.
Uber has cut the losses, at least in SEA. Uber CEO Dara Khosrowshahi stated in his email to employees that the company invested US$562.40 million in the region but now has a 27.5 percent stake in Grab that is worth billions. Uber will then reap real money from Grab should its business continues to flourish.
According to Mr Anuj Jain, co-founder of Singapore’s venture platform Startup-O, Uber could be trying to “clean up its balance sheet” as it prepares for a potential initial public offering (IPO) in 2019. It can also keep its strategic foothold in the region and keep a close watch on this fast changing-growing market.
For Grab, what could be a more exciting moment than a smaller company taking down a behemoth from the US and becoming one itself, making a good business case study along the way. Having access to new user database also means better understanding of consumers and better tailored services.
The third and probably the happiest winner is Japan’s SoftBank Group which invested in both companies. According to a Reuter’s report, SoftBank CEO Masayoshi Son was highly supportive of the deal but said the decision was driven independently and was in best interests of the two firms.
The concerns are now on the drivers and ride-sharers themselves. Without the acquisition, the drivers have already been complaining about the ever-stricter remuneration scheme mainly as a result of the competition.
Existing Grab and Uber drivers have their reasons why they chose to drive for one but not the other. The changes raised uncertainties in how they make money, their business obligations, potential losses and opportunities.
On the consumers’ side, less opened competition means bad news. Many already expressed concerns via social media regarding possible price hike (which most likely finds its way to the consumers) and less control over their travel options.
In big picture, the start-up ecosystem is also strengthened and becoming more active. Early investors are rewarded and now more confident to invest in other start-ups.
The new start-ups themselves are now high in spirit since it has proven that a small business can beat the behemoth given the right knowledge and circumstances.
Major remaining players in Thailand are now Grab, EasyTaxi and Line Taxi.
Top: Grab and Uber logos placed side by side. Photo: Reuters via Straits Times
Source Credit: Internet, Channel News Asia, and TechInAsia
By Piboon Awasdaruharote