Is Grab and Uber closing in on a deal?

It seems that Uber is continuing to downsize itself in Asia. After reaching similar decisions in the past with Didi in China and Yandex in Russia, it is now Grab's turn in Asia. The South East Asian market contains around 640 million people in countries that include the Philippines, Singapore, Malaysia, Indonesia, Thailand and South Korea.

If this deal goes through, and it most probably will since SoftBank stands behind it. SoftBank is a major investor in both Uber and Grab and intends to restructure the global presence of all rideshare companies so that there is less friction in all markets. Then Uber will sell to Grab its South East Asian presence for a percentage of Grab, and thereby consolidate a total relationship in the Asian Region, that does not include India.

Grab has an estimated value of around $6 billion, while Uber is set around $72 billion. What will make a difference is that Uber will be able to reduce operating and marketing overheads and just enjoy income from Grab's endeavors? This goes hand in hand with Khosrowshahi's vision for a leaner Uber reaching their IPO in 2019.

The only Asian country that Uber does not intend to leave at the moment in India, and this is based on Khosrowshahi's visit earlier this year and his statements to the press regarding Uber's decision to maintain and increase their Indian presence.

The deal will most probably occur within the next few days according to sources in Reuters.

Of course it will happen, the writing was on the board. I think Uber will retain its position in India and Australia, but as far as the rest of Asia is concerned, I see Grab, Ola and Didi splitting up the area between themselves. The Philippines (Manila mainly) might be the next target on Grab’s radar, only time will tell.

The problem with Uber is that it’s trying to do too many things at the same time. How could you compete abroad if you’re already facing fierce competition at home? Wouldn’t you want to defend your home turf before you try to conquer the world market? I think Dara does realize this now and wants to make deals with competitors like Grab, Ola, Didi, etc. to at least have some stake in the game in the international market.

Yup, it I did expand too quickly. What will solve the issue is if they do consolidate their operations into specific geographical areas and concentrate on expanding their product and service mix in those areas.