Uber has announced plans to sell its south-east Asia business to the bigger regional rival, Grab.
Under the new deal, Uber will have a 27.5 percent stake in the Singapore-based Grab and Uber’s CEO, Dara Khosrowshahi will become a member of Grab’s board.
“It will help us double down on our plans for growth as we invest heavily in our products and technology,” said Khosrowshahi.
The firms have said the deal will benefit customers but there are warnings that the deal will lead to higher prices for consumers.
The deal between Uber and Grab is the latest move by Uber to move away from international operations. The car-hailing firm sold its China business to local rival Didi Chuxing in 2016.
Anthony Tan, Grab’s chief executive, has said that the deal “marks the beginning of a new era” for customers.
Khosrowshahi is preparing the car-hailing app for an initial public offering that will take place in 2019. Preparation has been difficult after the group lost $4.5 billion in 2017 as well as face high levels of competition in Asia and face a regulatory crackdown in Europe.
When asked if Uber was planning any further deals to unload international operations and hold stakes in competitors, Khosrowshahi said in a note to employees: “It is fair to ask whether consolidation is now the strategy of the day, given this is the third deal of its kind … The answer is no.”
“One of the potential dangers of our global strategy is that we take on too many battles across too many fronts and with too many competitors,” he added.
While the group’s CEO said that operations in Asia were not going to be “profitable anytime soon”, Uber’s performance is more promising among its core markets in US, Australia, New Zealand and Latin America, which are on the way to profitability.