Uber is selling its Southeast Asian business to Grab, Bloomberg reported on Sunday, March 25, 2018.

This news comes ahead of the deal that could be announced on Monday.

Uber Eats included

The agreement will include all of Uber’s operations in Southeast Asia, as well as Uber Eats in the region.

Uber gets stake

In return, Uber gets a stake of between 25 and 30 percent in the new combined business.

This marks Uber’s operational exit and hands a victory to Grab, which is taking on Go-Jek as well.

SoftBank Group backs Grab and Uber

Japan’s SoftBank Group Corp. became the largest shareholder in Uber in January 2018.

It is also backing Grab and China’s Didi Chuxing.

Grab was most recently valued at US$6 billion.

With both Grab and Uber backed by SoftBank, the rationale would be to encourage ride-hailing startups in SoftBank's portfolio to cut back on competing with each other and consolidating their positions to avoid burning through more cash.

Uber’s business in China was sold in 2016 in return for a 17.5 percent stake in Chinese ride-hailing leader Didi Chuxing.

Uber then agreed to sell its Russian business to Yandex.

Uber is cleaning up its financials in preparation for an initial public offering in 2019.

Pulling out of markets like Southeast Asia would boost profits at a company that has lost US$10.7 billion since its founding nine years ago.

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Implications

News of Grab’s acquisition of Uber will send confusing and perhaps worrying signals to consumers in Singapore.

How Singapore's regulators and lawmakers will react will be interesting.

A new UberFlash service was made available from Jan. 19 recently, barely a month after Uber and Singapore taxi operator ComfortDelgro announced their alliance in late 2017.

Further mergers will see competition decrease and likely price increases for riders.

Here’s a totally unrelated but equally interesting story:

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