If you’ve still got Uber discount codes lurking in your text message inbox, you’d better use them up quick. The international ride-hailing platform announced at the end of March that it is selling its Southeast Asia operations, including Cambodia, to its competitors, Grab. .
For Uber users in the Kingdom, the app will continue operating for two more weeks from the date of the acquisition (26 March). A press release issued by Grab said that the two companies are working to smoothly and quickly migrate Uber drivers, rider and partners to the Grab platform.
A Malaysian company, Grab is a relative late-comer to Phnom Penh’s now teeming ride-hailing market. Wee Tang Yee, Grab’s country head in Cambodia, predicted that the acquisition will gradually lead to lower fares, increasing the competition on home-grown companies, PassApp and ExNet, and even on food-delivery services.
“We will rapidly and efficiently expand GrabFood into all major SEA countries in the next quarter,” said Grab co-founder, Tan Hooi Ling, in the press release. “GrabFood will also be another great use case to drive the continued adoption of GrabPay mobile wallet and support our growing financial services platform.”
Founded in 2012, Grab started out as a taxi-hailing app in Kuala Lumpur. In a few short years, it has become the region’s dominant ride-hailing service, successfully raising $4 billion from investors, according to Bloomberg magazine. It was most recently valued at $6 billion and now boasts 86 millions downloads with a range of hailing services in 191 cities.
Under the deal, Grab will acquire all of Uber’s operations in a market of 620 million people, including food delivery service UberEats, while Uber will take a 27.5% stake in Grab and its CEO, Dara Khosrowshahi, will join Grab’s board of directors.
The move, described as a defeat for Uber by Bloomberg, will allow the company to cut back on losses in its Southeast Asia operations ahead of a planned initial public offering next year. “But the deal marks the latest retreat by the world’s most valuable startup from a rapidly expanding arena: Uber sold its business in China to Didi in 2016 after a battle in which both burned through their cash to court drivers and riders with rich subsidies. Uber negotiated a similar move in Russia last year”, said the business magazine.