Uber lands investment from Singapore’s largest taxi operator in blow to rival Grab
Uber has struck a major deal in Southeast Asia after ComfortDelGro, Singapore’s largest taxi operator, announced [PDF] it has agreed to buy a majority share of the ride-hailing giant’s Singapore-based business.
The deal will see a joint venture valued at SG$642 million (US$474 million) established to run Uber Singapore. Comfort will contribute SG$295 million in what is the largest investment outlay in its forty-plus-year history.
The deal is subject to regulatory approval, but if and when completed it will give Uber exclusive access to Comfort’s fleet of more than 15,000 vehicles in Singapore. That would more than double Uber’s drive numbers in Singapore. While its fleet has decreased over the past year, Comfort — which also operates the CityCab brand — has a dominant share of Singapore’s total of 25,325 taxis.
“ComfortDelGro has been in the taxi business for close to five decades and we have seen the industry evolve significantly. Despite the many changes that have taken place, taxis have remained a relevant option for people get around the city. The question many have been asking is: For how long?” ComfortDelGro Chairman Lim Jit Poh said in a statement.
“We are confident that taxis will be around for a long time to come. But we are also aware
that the personalised mobility business is a very different one now. By working
together, we feel that we will be able to unleash a lot of synergy which will benefit
consumers and drivers alike,” he added.
Comfort, which is listed on the Singapore Stock Exchange, announced it was in talks with Uber over a “potential strategic alliance” in August so the tie-in doesn’t come out of the blue. Following that disclosure, however, Uber’s fierce rival Grab began aggressively approaching Comfort drivers with the aim of converting them to its platform. Singapore-based Today suggested that as many as 2,000 drivers were considering jumping ship, but Grab’s efforts haven’t scuppered the deal itself.
The deal Comfort is part of a new focus on business development from Uber’s recently appointed Asia Pacific chief Brooks Entwistle. A former Chairman of Goldman Sachs Southeast Asia, Entwistle told TechCrunch in a recent interview that he is focused on doing deals with governments, taxi firms and other entities that would traditionally be more akin to foes than friends of Uber.
To that end, Uber has struck deals with taxi firms in Taiwan, it inked its first mobile wallet deal in Southeast Asia with Vietnam’s Momo, and it is looking into the potential to enter the bike sharing space, Entwistle said.
The Comfort deal is a major blow to Grab, which is estimated to have built a fleet of around 10,000 drivers in Singapore. The company was originally founded in Malaysia but it now counts Singapore as its HQ. Grab raised $2 billion from SoftBank and China’s Didi Chuxing in July and, while reliable market data is hard to find, most observers believe the firm has edged ahead of Uber in overall marketshare across Southeast Asia.
If Uber can hunt down influential alliances like this deal with Comfort in the other six markets where it rivals Grab in Southeast Asia then the battle is likely to be even more competitive in the future.
Featured Image: ANTHONY WALLACE/Getty Images
Source: Tech Crunch