If you’re into business news then you may have already got the news that Uber is reportedly making an ambitious push to sell its Southeast Asian business to the regional rival Grab for around $6 billion. Although these reports are still very speculative but top sources claim that this high profile deal hinges on one critical factor. That factor is SoftBank (a common investor in both ride-hailing companies).
According to reports, SoftBank is trying really hard to convince Uber to sell off its entire Southeast Asian business to the Singapore headquartered Grab. SoftBank’s reason for such a move, as is claimed by closed sources, is that the U.S. ride-hailing giant has lost way too much money in the Southeast Asian markets, which constitutes of countries like Malaysia, Indonesia, Philippines, Vietnam, Thailand, Myanmar, and Cambodia. The Japanese investment behemoth believes that such a move will help Uber to focus more on lucrative markets, mainly the U.S, Europe and Latin American market.
SoftBank’s raison d’etre is very much based on strong ground realities, which clearly suggests that Uber over the years has lost substantial market share to Grab in almost all the key Southeast Asian markets. This plainly means that Uber’s heavy investments in last couple of years have only yielded huge and mounting losses.
Uber’s CEO still upbeat on Southeast Asian market
Meanwhile, if Uber’s new Chief Dara Khosrowshahi’s latest comments on Southeast Asian markets are anything to go by then it seems Uber is not yet part away with region’s business. Khosrowshahi, who is currently in India to meet top government officials, told the Indian press that the company will continue to invest in the region despite mounting losses.
However, he went on to state “We expect to lose money in Southeast Asia and expect to invest aggressively in terms of marketing, subsidies etc.”
Uber’s unwillingness to exit from Southeast Asian market despite intense competition clearly underscores the fact that it is still hopeful of turning profitable in the region. This hope steams from the fact that the region boasts one of the highest smartphone and internet penetration.
Nonetheless, if Uber does pay heeds to SoftBank and exits from Southeast Asian then this will be its third high profile exit. In 2016, it was forced to exit China owing to competition from Didi Chuxing, followed by an unceremonious exit from Russia next year.