Grab announced on the 26th March that it’s officially merging Uber’s operations in Southeast Asia with its own platform. A merger that has been rumored to be in talks for quite some time with the help of SoftBank, a Japanese conglomerate with stakes in Uber and has backed Uber’s competitors like Grab, Didi Chuxing and Ola. This is all a move for Uber to refocus itself and fix its financial issues before their planned public listing.
Now Uber doesn’t transfer its operations to Grab for free – Uber will have a 27.5% stake in Grab and Dara Khosrowshahi, Uber’s chief executive, will be joining Grab’s board. A similar move that has been seen in China, with Didi Chuxing buying Uber’s operations in China.
With this new takeover and integration, Grab will be expanding on its existing GrabFood businesses, localised transportation services, government and public transportation integrations, GrabCycle, GrabShuttle Plus, Grab Financial, and GrabPay. Now this is what I would call aggressive expansion with Grab stating that they will be heavily focusing on the rapid growth of GrabFood this year. Which makes sense with the integration of not only Uber’s transportation operation, but also Uber Eats.
So a question most Uber users will ask is, what happens now? Well, users will still be able to use the app in Southeast Asia till 9th April, 2018. Afterwards, Uber will no longer be available in Southeast Asia, but can be used outside areas that they haven’t sold off. You will also keep your travel history and transactions for bookkeeping purposes.
We should also mention that Uber users have already received an “Important Terms Update” in their email’s inbox. Which basically boils down to this statement:
“Please note that by continuing to use or access the platform after the Effective Date, you agree to be bound by the Terms. Your account information—including your name, phone number, trip and delivery history —will be transferred by us to GHI.” – Uber
Now what this merger between Grab and Uber could mean in the long term is up for debate. While Grab states that it allows for more jobs being available to the drivers and lower wait times for customers, it’s also a monopoly. With no territorial wars or real competition, nothing is stopping prices from increasing or for unfair conditions for drivers. Which is essentially what is probably happening in China.
The only question we all have is, how will the market be under Grab’s rule?