Uber’s India Doom Written in the Stars

Bollywood actor Shahrukh Khan is the new Taj Mahal.

From Apple Inc. to Google, when global CEOs want to showcase their commitment to the Indian market, they no longer look for photo-ops against the famous marble mausoleum of a long-dead emperor’s wife. Instead they take a selfie with India’s reigning movie king.

Dara Khosrowshahi did just that last month on his maiden trip to Asia as Uber Technologies Inc.’s new chief executive officer.

Tellingly, Khosrowshahi gave Singapore — Uber’s regional headquarters — a miss on that visit, reinforcing speculation that the ride-hailing app would sell its Southeast Asian business to Grab. The deal was announced on Monday. Grab is taking over Uber’s operations and assets in Cambodia, Indonesia, Malaysia, Myanmar, the Philippines, Singapore, Thailand and Vietnam. In exchange, Uber gets a 27.5 percent stake in its closely held rival; Khosrowshahi will join Grab’s board.

Since the negotiations earlier this month were said to be for a stake in the high teens or 20 percent, according to a Bloomberg News report, Uber appears to have done pretty well.

The War Is Over

Uber is selling operations and assets in Southeast Asia to Grab, in exchange for a 27.5 percent stake in its rival

Source: Grab, citing surveys by TNS conducted during June and July 2017

Uber's India Doom Written in the Stars

Still, the real victory unquestionably belongs to Masayoshi Son’s SoftBank Group Corp., the single-biggest investor in both companies. As I wrote earlier this month, by engineering a retreat for the U.S. company before any more bloodletting for market share, Son ensures that six-year-old Grab will emerge as an early champion in a winner-takes-all business.

A faster path to profit for Uber could also boost its valuation ahead of a planned IPO next year. But at what cost? Having already surrendered China to Didi Chuxing, beating a retreat from Southeast Asia is a precursor to perhaps losing India, the lone remaining jewel in Uber’s once-flourishing Asian empire.