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The author forgot to mention that Uber hasn't just left South-East Asia. It was officially acquired by Grab and got 27.5% stake in Grab in exchange[0] Before l

The author forgot to mention that Uber hasn't just left South-East Asia. It was officially acquired by Grab and got 27.5% stake in Grab in exchange[0] Before leaving the market, Uber had a really intensive price war with Grab (for a few months I was getting SG$5 discounts for 5 rides a week by each company). While one might argue that they could have stayed longer and expand their application into a super-app (like Gojek, ICBC or Wechat), it seems they preferred to instead invest in a local company that knows that market better. I think it's still too early to say whether it was a good decision, and definitely too early to say whether it was a mistake. [0] https://thenextweb.com/asia/2018/03/26/ubers-southeast-asia-operations-acquired-by-grab/ https://thenextweb.com/asia/2018/03/26/ubers-southeast-asia-...

m3nu 7y ago
Softbank is invested in both – Grab and Uber. They weren't keen on losing money by competing against themselves.[1] So it wasn't 100% up to Uber to quit and take this stake. 1: http://fortune.com/2018/03/12/data-sheet-uber-softbank-grab/ http://fortune.com/2018/03/12/data-sheet-uber-softbank-grab/
- Traster 7y ago
  Which really opens up questions into monopoly rules where a single entity owns significant stakes in all the biggest players in the market and can intervene to stop legitimate competition.
  - steve19 7y ago
    Matt Levine addresses this quite often and has been for years. Hedge funds often own some of all competitors in a market. There might one day be anti trust issues with this. https://www.google.com/amp/s/www.bloomberg.com/amp/opinion/articles/2016-04-04/shareholder-activism-might-have-antitrust-issues https://www.google.com/amp/s/www.bloomberg.com/amp/opinion/a... (apologies for the amp link)
  - chanux 7y ago
    The authorities did find the deal to be anti-competitive https://www.straitstimes.com/singapore/transport/competition-watchdog-finds-grab-uber-deal-anti-competitive-lists-corrective https://www.straitstimes.com/singapore/transport/competition...
- Abishek_Muthian 7y ago
  Same happened in China with Didi & Uber. Softbank has investments in other major ride hailing services like Ola(India), 99 Taxis(Brazil) as well. Ola is now refusing to take further investments from Softbank as it had went behind Ola CEO's back to acquire its initial investors.
gnufied 7y ago
Not to mention they haven't left India at all. They are largest on-demand cab provider there. Last I checked, India was still in South-East Asia.
- phowon 7y ago
  India is generally not considered to be in South-East Asia.
  - gnufied 7y ago
    I think you are right. I guess my theory was based on some pre-conceived notion that was not entirely accurate. Wikipedia does say: >The Andaman and Nicobar Islands of India are geographically considered part of Maritime Southeast Asia. Eastern Bangladesh and Northeast India have strong cultural ties with Southeast Asia and sometimes considered both South Asian and Southeast Asian.
    - maalicious 7y ago
      India and the surrounding nations make up the Indian subcontinent. The region is generally called South Asia rather than SEA
      - inawarminister 7y ago
        Sometimes people say Southeast Asia to mean China, Japan, and Korea too, which is... Fun.
matchagaucho 7y ago
The article also omits regional protectionism, local laws, and severe financial penalties that were being levied against Uber. Uber basically had a choice between a 27.5% stake in Grab or 0% in the entire Asian rideshare market. There's no second guessing this decision IMO. It was the right decision at the time.
- stcredzero 7y ago
  The article also omits regional protectionism, local laws, and severe financial penalties that were being levied against Uber. Uber was basically pioneering a new model of doing business. You can't really patent a new business model. (Though companies try.) One can only try to compete in it.
- barry-cotter 7y ago
  South East Asia isn’t a country and ASEAN has less political fellow feeling than Europe does in the EU. I sincerely doubt the Thai or Malaysian government much care whether a Singaporean or an American company is the dominant player in their local ride hailing industry.
  - inawarminister 7y ago
    Indeed, for example, the Indonesian Go-Jek expansion to Vietnam and Philippines are hitting up quite big moat/barrier of the respective governance. Even with the much-lauded ASEAN, I think Southeast Asia is much less integrated than, say, South America. Or even Africa(n Union). Might be because all the diversity in language, religion, and culture here. [There's push to make Malay a working language of ASEAN, if the non-Austronesians agree this would make much sense than using English which is only spoken by the elite few of each countries (minus Singlish and perhaps Malaysian... Or Filipinos.)]
ergocoder 7y ago
South-East Asia market is very strange. Uber should have won the market easily. I live in US and from Thailand. Grab in Thailand is much worse than Uber/Lyft in US in terms of experience. The fundamentals don't work well. I used Grab 5 times in Bangkok and only succeeded once (e.g. the driver accepted but never came, the driver almost arrived but turned away). In the success case, I waited 20+ mins (which is normal for Bangkok's traffic, I guess). In US, the reliability has been 100% for me, and the wait time is like 10 mins max.
- afiori 7y ago
  This can also be an argument for the market being too different and so justifying their choice.
- vbezhenar 7y ago
  It’s because of drivers not because of app.
- seanmcdirmid 7y ago
  That's too bad. I can see it being a huge boon in places where getting screwed by taxi drivers is common, especially at airports (e.g. Manila...).
  - arnvald 7y ago
    It is still better than local taxis. I've been scammed by a taxi driver in Philippines and had problems with taxis at the airport in Indonesia. I switched to Grab/Uber and even if the quality was similar, at least I was relaxed and didn't worry about being scammed anymore.
- arnvald 7y ago
  From time to time I had similar experience to yours, e.g. a driver in Manila cancelled just before arriving, because it appeared that there was a huge traffic jam close to where I was waiting etc. From my perspective though both Uber and Grab offered similar level of service in SEA. Uber had better mobile application, but prices were very similar and often drivers used to drive for both companies, so there was really little difference between both services.
seanmcdirmid 7y ago
ICBC? You mean the Chinese bank (aka, biggest bank in the world)?
- arnvald 7y ago
  Yes, the Chinese bank. They have a mobile app where they include a bunch of mini-applications developed by separate companies (essentially they're web views that interact with a small API provided by the main app)
acchow 7y ago
Does it seem likely that the "Super App" model will survive the next decade? Why would we expect 1 vendor to make the best experience for many different products?
- draw_down 7y ago
  Well, who said the best experience will necessarily win? I can think of many markets where that is not the case.
djfergus 7y ago
I'm based in Malaysia, here are some of my observations: 1) Grab treated drivers better than Uber - e.g. the Grab app displays the destination so drivers who don't want to go far out of their way or into congestion can reject fares (whereas Uber used to hide destinations and heavily penalise drivers who reject trips). 2) Prices went up immediately after Uber exited, even now Grab has moved to a floating arbitrary pricing rather than mileage/time x $X. So both companies were providing significant subsidies which were unlikely to be unsustainable. Also Uber had defined hot-spots and if drivers idles in those areas with their app open they would receive an hourly wage (topped up with fares that they get). Grab doesn't do this currently according to drivers I've spoken to, its another form of subsidy to get customers a car faster and snatch market share. 3) Related to (1) above, Grab played the politics better. They got the taxi drivers on-side (Grab was originally MyTeksi and just used to hail a licensed taxi) and also navigated govt legislation better vs Uber strategy of just ignoring/skirting laws and trying to force their way through with market share and popularity. I was in an uber a few years ago and the car was pulled over by airport police, I was told to get out and find another ride - wasn't clear if the driver was getting fined or a warning. 4) The super app is annoying garbage. Now I need 3 laggy clicks to book a car rather than one tap on the app. Everyone wants to be WeChat and is failing with bad software. 5) Malaysia's govt is cracking down with new regulations. E.g. from later this year all Grab drivers will need to register their cars as a public service vehicle. This has implications for insurance but since it is a public record will also cause devaluation of used vehicles that have been driven for Grab (since any potential buyer can look up this record and negotiate a better price - Malaysians don't like heavily used second-hand goods). A few drivers I have spoken to have said they will quit driving for Grab before the legislation comes in since they are only part-time and their estimated loss of car value out-weighs all the money they could earn driving grab a few nights a week. So this will pull supply out of the market. 6) Grab was earlier than uber in allowing cash payments which anecdotally I've heard users and drivers really like. One curious anomaly is that Grab is now also charging cancellation fees. But if you booked a car with cash payment and then cancel, then the next time you book a car the fee will be added onto your fare. And the driver has the responsibility to advise you and collect the fare. A driver was telling me he keeps getting 1 star reviews from riders who get angry at him adding on the late fee (which could have been from days earlier).

m3nu 7y ago

Softbank is invested in both – Grab and Uber. They weren't keen on losing money by competing against themselves.[1] So it wasn't 100% up to Uber to quit and take this stake. 1: http://fortune.com/2018/03/12/data-sheet-uber-softbank-grab/ http://fortune.com/2018/03/12/data-sheet-uber-softbank-grab/

Traster 7y ago
Which really opens up questions into monopoly rules where a single entity owns significant stakes in all the biggest players in the market and can intervene to stop legitimate competition.
- steve19 7y ago
  Matt Levine addresses this quite often and has been for years. Hedge funds often own some of all competitors in a market. There might one day be anti trust issues with this. https://www.google.com/amp/s/www.bloomberg.com/amp/opinion/articles/2016-04-04/shareholder-activism-might-have-antitrust-issues https://www.google.com/amp/s/www.bloomberg.com/amp/opinion/a... (apologies for the amp link)
- chanux 7y ago
  The authorities did find the deal to be anti-competitive https://www.straitstimes.com/singapore/transport/competition-watchdog-finds-grab-uber-deal-anti-competitive-lists-corrective https://www.straitstimes.com/singapore/transport/competition...
Abishek_Muthian 7y ago
Same happened in China with Didi & Uber. Softbank has investments in other major ride hailing services like Ola(India), 99 Taxis(Brazil) as well. Ola is now refusing to take further investments from Softbank as it had went behind Ola CEO's back to acquire its initial investors.

gnufied 7y ago

Not to mention they haven't left India at all. They are largest on-demand cab provider there. Last I checked, India was still in South-East Asia.

phowon 7y ago
India is generally not considered to be in South-East Asia.
- gnufied 7y ago
  I think you are right. I guess my theory was based on some pre-conceived notion that was not entirely accurate. Wikipedia does say: >The Andaman and Nicobar Islands of India are geographically considered part of Maritime Southeast Asia. Eastern Bangladesh and Northeast India have strong cultural ties with Southeast Asia and sometimes considered both South Asian and Southeast Asian.
  - maalicious 7y ago
    India and the surrounding nations make up the Indian subcontinent. The region is generally called South Asia rather than SEA
    - inawarminister 7y ago
      Sometimes people say Southeast Asia to mean China, Japan, and Korea too, which is... Fun.

matchagaucho 7y ago

The article also omits regional protectionism, local laws, and severe financial penalties that were being levied against Uber. Uber basically had a choice between a 27.5% stake in Grab or 0% in the entire Asian rideshare market. There's no second guessing this decision IMO. It was the right decision at the time.

stcredzero 7y ago
The article also omits regional protectionism, local laws, and severe financial penalties that were being levied against Uber. Uber was basically pioneering a new model of doing business. You can't really patent a new business model. (Though companies try.) One can only try to compete in it.
barry-cotter 7y ago
South East Asia isn’t a country and ASEAN has less political fellow feeling than Europe does in the EU. I sincerely doubt the Thai or Malaysian government much care whether a Singaporean or an American company is the dominant player in their local ride hailing industry.
- inawarminister 7y ago
  Indeed, for example, the Indonesian Go-Jek expansion to Vietnam and Philippines are hitting up quite big moat/barrier of the respective governance. Even with the much-lauded ASEAN, I think Southeast Asia is much less integrated than, say, South America. Or even Africa(n Union). Might be because all the diversity in language, religion, and culture here. [There's push to make Malay a working language of ASEAN, if the non-Austronesians agree this would make much sense than using English which is only spoken by the elite few of each countries (minus Singlish and perhaps Malaysian... Or Filipinos.)]

ergocoder 7y ago

South-East Asia market is very strange. Uber should have won the market easily. I live in US and from Thailand. Grab in Thailand is much worse than Uber/Lyft in US in terms of experience. The fundamentals don't work well. I used Grab 5 times in Bangkok and only succeeded once (e.g. the driver accepted but never came, the driver almost arrived but turned away). In the success case, I waited 20+ mins (which is normal for Bangkok's traffic, I guess). In US, the reliability has been 100% for me, and the wait time is like 10 mins max.

afiori 7y ago
This can also be an argument for the market being too different and so justifying their choice.
vbezhenar 7y ago
It’s because of drivers not because of app.
seanmcdirmid 7y ago
That's too bad. I can see it being a huge boon in places where getting screwed by taxi drivers is common, especially at airports (e.g. Manila...).
- arnvald 7y ago
  It is still better than local taxis. I've been scammed by a taxi driver in Philippines and had problems with taxis at the airport in Indonesia. I switched to Grab/Uber and even if the quality was similar, at least I was relaxed and didn't worry about being scammed anymore.
arnvald 7y ago
From time to time I had similar experience to yours, e.g. a driver in Manila cancelled just before arriving, because it appeared that there was a huge traffic jam close to where I was waiting etc. From my perspective though both Uber and Grab offered similar level of service in SEA. Uber had better mobile application, but prices were very similar and often drivers used to drive for both companies, so there was really little difference between both services.

seanmcdirmid 7y ago

ICBC? You mean the Chinese bank (aka, biggest bank in the world)?

arnvald 7y ago
Yes, the Chinese bank. They have a mobile app where they include a bunch of mini-applications developed by separate companies (essentially they're web views that interact with a small API provided by the main app)

acchow 7y ago

Does it seem likely that the "Super App" model will survive the next decade? Why would we expect 1 vendor to make the best experience for many different products?

draw_down 7y ago
Well, who said the best experience will necessarily win? I can think of many markets where that is not the case.

djfergus 7y ago

I'm based in Malaysia, here are some of my observations: 1) Grab treated drivers better than Uber - e.g. the Grab app displays the destination so drivers who don't want to go far out of their way or into congestion can reject fares (whereas Uber used to hide destinations and heavily penalise drivers who reject trips). 2) Prices went up immediately after Uber exited, even now Grab has moved to a floating arbitrary pricing rather than mileage/time x $X. So both companies were providing significant subsidies which were unlikely to be unsustainable. Also Uber had defined hot-spots and if drivers idles in those areas with their app open they would receive an hourly wage (topped up with fares that they get). Grab doesn't do this currently according to drivers I've spoken to, its another form of subsidy to get customers a car faster and snatch market share. 3) Related to (1) above, Grab played the politics better. They got the taxi drivers on-side (Grab was originally MyTeksi and just used to hail a licensed taxi) and also navigated govt legislation better vs Uber strategy of just ignoring/skirting laws and trying to force their way through with market share and popularity. I was in an uber a few years ago and the car was pulled over by airport police, I was told to get out and find another ride - wasn't clear if the driver was getting fined or a warning. 4) The super app is annoying garbage. Now I need 3 laggy clicks to book a car rather than one tap on the app. Everyone wants to be WeChat and is failing with bad software. 5) Malaysia's govt is cracking down with new regulations. E.g. from later this year all Grab drivers will need to register their cars as a public service vehicle. This has implications for insurance but since it is a public record will also cause devaluation of used vehicles that have been driven for Grab (since any potential buyer can look up this record and negotiate a better price - Malaysians don't like heavily used second-hand goods). A few drivers I have spoken to have said they will quit driving for Grab before the legislation comes in since they are only part-time and their estimated loss of car value out-weighs all the money they could earn driving grab a few nights a week. So this will pull supply out of the market. 6) Grab was earlier than uber in allowing cash payments which anecdotally I've heard users and drivers really like. One curious anomaly is that Grab is now also charging cancellation fees. But if you booked a car with cash payment and then cancel, then the next time you book a car the fee will be added onto your fare. And the driver has the responsibility to advise you and collect the fare. A driver was telling me he keeps getting 1 star reviews from riders who get angry at him adding on the late fee (which could have been from days earlier).