Shall Grab Acquire Uber’s Southeast Asia Business?
Recently I have read from a blog post that Grab shall acquire the SEA business of Uber. Then why this is happening and shall it be realized? I will merge the case in Uber China, Uber business Korea vs. Kakao T Taxi, and Southeast Asia case.
Payment platform issue
How to pay really matters when it comes to pay something. When I pay my hotel fee via Hotels.com or Booking.com I always try myself to avoid Korean Won payment because of the additional fee.
In China, Uber aligned their service with Baidu Pay. And this was not the major payment platform. Didi Chuxing used Alipay and Tencent pay. This made more Chinese citizens to use the platform instead of Uber China.
This is also happening in SouthEast Asia. Grab is more flexible in its payment options, and it accepts both card and cash. This is a critical growth driver in light of the fact that consumers strongly preferred using cash. Uber, on the other hand, has been slower in accepting cash.
The Economy of Scale
I know that the Uber drivers are more kind and provide more better service that the ordinary taxi drivers in Seoul. I always wanted to hail my taxi via Uber application, but there was no taxi on the application. Therefore, I started to use Kakao T Taxi again.
It is happening same for Grab as well, Starting out in Malaysia, Grab now offers wide-ranging services in more than 160 cities across SEA countries including Malaysia, Singapore, Indonesia, India, Thailand, the Philippines, Vietnam, Myanmar, and Cambodia, whilst Uber operates in just around 60 cities in the region.
The shareholder want the best option.
If you remind the marketing war case between Didi Chuxing and Uber, the investor does not want chicken game. Softbank injected multi-billion dollar investment into Uber last year. And Softbank is major shareholder of Grab as well. They are acting as a board of director in both companies.
If the two players become one and Uber is being focused on European and US market, this will give more RoI(Return of Investment) for Softbank’s perspective.
Sotbank will play a consolidating role.” A source close to Grab told media last year following the deal.
The original article was written on my personal blog as well: http://www.techrux.net/shall-grab-acquire-ubers-southeast-asia-business/