The sale of Uber's regional business marks the first major consolidation efforts among ride-hailing companies in Southeast Asia.
Grab has always kept optimizing its app as per the local conditions, whereas Uber's app remained largely unchanged from the one it used in the U.S and other markets.
Uber's sale in Southeast Asia, where Grab claims 5 million daily users, follows several strategic deals in competitive global markets. Previously Uber sold its China business to Didi Chuxing and merged its Russian Federation operations with tech firm Yandex.
In an e-mail to employees post the Grab deal, Khosrowshahi said Uber will get 27.5 per cent stake in the combined company.
Why Grab? Why not Uber?
It is Uber's second exit from Asia after pulling out of China in 2016.
"The acquisition accelerates Grab's path to profitability in its core transport business, as it's the most cost-efficient Southeast Asian platform", Grab, a fast growing Southeast Asian ridesharing, food delivery, and financial services business, said in a statement. Khosrowshahi said that it will assist us in dueling down on our suggestions for expansion as we expend deliberately in the products and technology to generate the supreme customer experience on the planet.
Anthony Tan, Grab group CEO and co-founder, said, "Together with Uber, we are now in an even better position to fulfill our promise to outserve our customers". The value of the deal has not been disclosed yet. Consolidation efforts are leading up to a potential initial public offering in 2019 where Uber hopes to raise enough capital to further expand its operations in developing nations.
The deal will see Grab take over Uber's rideshare and food delivery business, Uber Eats, in Cambodia, Indonesia, Malaysia, Myanmar, the Philippines, Singapore, Thailand and Vietnam, according to a press release by Grab on Monday.? Preparation has been hard 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.
Grab, which started out as a taxi-hailing app in Kuala Lumpur in 2012, became the region's dominant ride-hailing service in past years with $4 billion raised from investors.