Grab announced on Monday (Mar 26) that it has acquired Uber’s Southeast Asia operations, confirming reports of the merger that surfaced over the weekend.
Grab said it will integrate Uber’s ridesharing and food delivery business in the region into its platform.
"This deal is the largest-ever of its kind in Southeast Asia," ride-hailing service Grab said in a media release on Monday.
"With the combined business, Grab will drive towards becoming the number one online-to-offline mobile platform in Southeast Asia and a major player in food delivery."
As part of the acquisition, Uber will take a 27.5 per cent stake in Grab and Uber CEO Dara Khosrowshahi will join Grab's board.
It will take over Uber’s operations and assets in Singapore, Malaysia, Cambodia, Indonesia, Myanmar, the Philippines, Thailand and Vietnam.
Grab President Ming Maa told Reuters that the acquisition was driven independently by the two companies, and was supported by their common investor, Japan's SoftBank Group.
Mr Anthony Tan, group CEO and co-founder of Grab said: "We are humbled that a company born in Southeast Asia has built one of the largest platforms that millions of consumers use daily and provides income opportunities to over 5 million people.
"Today’s acquisition marks the beginning of a new era. The combined business is the leader in platform and cost efficiency in the region."
Ms Tan Hooi Ling, co-founder of Grab said they will expand GrabFood into all major Southeast Asia countries by the first half of 2018.
"GrabFood will also be another great use case to drive the continued adoption of
GrabPay mobile wallet and support our growing financial services platform," she said
Grab also said in the release that it will continue to grow its core transportation offerings and while expanding its financial offerings such as mobile payments, micro-financing and insurance.
"GrabPay as a mobile wallet will be available across all major Southeast Asian countries by the end of the year," it said.
We’re excited to take this step with Anthony and his entire team at Grab, and look forward to Grab’s future in Southeast Asia,” said Uber CEO Dara Khosrowshahi.
The deal marks the industry's first big consolidation in Southeast Asia, home to about 640 million people, and puts pressure on rivals such as Indonesia's Go-Jek, backed by Alphabet Inc's Google and China's Tencent Holdings Ltd.
Now that Uber is pulling out of Southeast Asia, attention may turn to the company's operations in India, which accounts for more than 10 percent of Uber's trips globally, but is not making money yet.
Uber's deal with Grab would be similar to the one struck in China in 2016, when a bruising price war ended in Didi Chuxing buying out Uber's China business in return for a stake in the company.
CUSTOMERS, SERVICE-PROVIDERS TO BE MIGRATED TO GRAB
In the media release, Grab said Uber drivers and riders, as well as Uber Eats customers, partnering eateries and delivery partners will be migrated to the Grab platform.
The Uber app will continue to operate for two weeks until Apr 8, after which riders will have to download the Grab app and register for an account to use the service. The data customers previously shared with Uber - excluding payment information - will also be transferred to Grab, although it will not be visible in the Grab app.
Customers can continue viewing their past trips and ratings on the Uber app, which can still be used with their accounts in countries outside Southeast Asia, Grab said.
Fares will continue to be calculated based on a base distance, with a dynamic surcharge that will be applied based on factors including demand and supply in that particular point in time, traffic conditions and estimated time
taken for the journey, according to Grab's website.
Meanwhile, Uber drivers can sign up to drive with Grab online. According to the website, it will usually take five working days after the driver completes training for Grab to process new driver registrations.
However, Grab said it may take a longer time to process registrations as it expects a large number of new drivers registering in the next few weeks.
Uber will pay its drivers any fares and incentives from rides picked up using the Uber Partner app, and will continue to handle and resolve any support requests entered by its drivers, Grab added.
In a Facebook update on Monday, Uber's car rental partner Lion City Rentals said that it was closed "until further notice", along with the UberHUB office at Paya Lebar Road.
Uber Eats will run until the end of May, after which Uber delivery and restaurant partners will move to the GrabFood platform, Grab said.
According to the website, customers can expect the prices on GrabFood to remain the same as they were on Uber Eats. Restaurant and delivery partners also should not expect to see a change in their compensation during the transition, it added.
In an email on Monday, Uber told customers that it would be transitioning its services over to Grab's platform by Apr 8 and that they should download the Grab app and create an account.
New Grab riders will get a promotion code for their first ride, it added.
In a similar email to Uber Eats customers, the company said that it would be combining operations with Grab on the GrabFood platform "in the coming months".
Customers can continue to use Uber Eats, the company said, adding that it would let users know when the new service was ready.