Uber CEO slams door on Grab merger rumours
Over the past couple of weeks there has been much speculation that Uber will sell its non-profitable Southeast Asian business to local rival, Singaporean giant Grab.
This was first reported by CNBC which cited sources close to the matter, and indeed it seemed to make sense since Asian tech company Softbank had recently invested in Uber, with the investor also holding a stake in Grab.
However, Uber’s CEO Dara Khosrowshahi has expressed that Uber n fact intends to “invest aggressively” in Southeast Asia in areas like marketing, even though the company has accepted it will initially make a loss in the region.
The CEO didn’t directly address talks of a Grab merger, but quashed rumours by adding, “from a competitive standpoint I think we can improve.”
He also cited the company’s Indian business as an example, since it is Uber’s fastest-growing market and accounts for more than 10% of global Uber use, but has yet to become profitable and is experiencing rivalry from local frim, Ola. The market in India is worth $12bn and as such Uber is investing millions in the country, with no intention of running away from the competition.
While new investor Softbank has indeed stated it wants Uber to focus on its profitable markets of the US, Europe, Latin America and Australia, as opposed to unprofitable region like Asia which is softly and competitive. Softbank only has a 15% stake in the company at this time so cannot heavily influence these decisions.
The $68bn valued ride-hailing company is still very much at the fore of its own decision making and leaves final decisions on mergers and partnerships up to the board.
While in many ways the Grab merger would have been an easy way out, and would have benefited Softbank by giving it a monopoly on ride-hailing in the region, Khosrowshahi and Uber won’t give up on Asia yet.
- Who will be Deloitte India’s next CEO? And why it mattersLeadership & Strategy
- 6 best flex workspaces for startups and enterprises in IndiaLeadership & Strategy
- Why India’s 5G future is lagging, but looking bright(er)Technology
- Sequoia eyes India startup potential with US$2.85bn raiseLeadership & Strategy