Uber's retreat from the global ridesharing business continued on Monday as the company announced it was selling its southeast Asian business to Singapore-based rival Grab. The deal gives Uber a 27.5 percent stake in Grab and gets its CEO, Dara Khosrowshahi, a seat on Grab's board of directors.
Uber is pulling out of Singapore, Indonesia, the Philippines, Malaysia, Thailand, Vietnam, Myanmar, and Cambodia. According to Bloomberg, this represents a region of 620 million people. The deal includes the operation of UberEats.
Bloomberg also notes that the deal was brokered by the Japanese firm Softbank, which is the biggest shareholder in both companies.
Uber once aspired to build a truly global ride-sharing business, but the company has been steadily retreating from that vision for the last two years. In 2016, Uber sold its Chinese business to Chinese rival Didi Chuxing, helping to stem huge losses there. Last year Uber spun off its Russian operations into a new joint venture with Russian Internet giant Yandex.
Uber has been forced to narrow its ambitions because the company can't afford to continue to losing cash like it has been. Uber lost more than $1 billion per quarter in 2017. And as we noted in our annual deathwatch article in December, Uber only had $6.6 billion in cash in mid-2017. Even with a $1.25 billion cash infusion at the end of last year, Uber will run out of cash in early 2019 if it continues losing money at its 2017 rate and can't raise more.
Any losses Uber was taking to expand or maintain its southeast Asian operations are about to be Grab's problem—and Uber still gets some of the potential upside thanks to that 27.5 percent stake.