After Grab deal, Uber to focus on India

BENGALURU: Ride-hailing major Uber may not look to replicate a Grab-like deal in India immediately after selling out in China and Russia. Uber’s exit from Southeast Asia is likely to intensify the Ola and Uber rivalry locally, sources said.

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After weeks of multiple reports hinting at the deal, Uber sold its Southeast Asian business to local rival Grab in lieu of a 28% shareholding in the combined entity. Two of the top executives at Uber — CEO Dara Khosrowshahi and COO Barney Harford — indicated the company is not looking to replicate the situation in India, at least for now. Harford tweeted after the announcement:

“Deal to combine forces w #Grab in SE Asia gives @Uber significant stake in region’s market leader. As importantly it gives us flexibility @Uber to triple down to win in our core markets - incl LATAM, India & Middle East - which I’m super excited about.”

Khosrowshahi, who was recently in India, told his staff that their strategy will not be to consolidate in all its core markets. “It is fair to ask whether consolidation is now the strategy of the day, given this is the third deal of its kind, from China to Russia and now Southeast Asia. The answer is no,” he said. Uber invested about $700 million in this market before reaching a deal with Grab. “This transaction now puts us in a position to compete with real focus and weight in the core markets where we operate, while giving us valuable and growing equity stakes in a number of big and important markets where we don’t,” he added in his message to Uber staff members.

The development assumes significance since the idea of a geography-based consolidation outside the US for Uber has been gaining momentum since SoftBank invested in the company. The Japanese investor holds a key stake in India’s Ola as well as Grab.