Uber is reportedly preparing to sell its business in Southeast Asia to rival taxi company Grab, according to a report from CNBC. Uber would reportedly receive a "sizeable" stake in Grab as part of the deal, CNBC said. Bloomberg wrote in 2017 that Uber was struggling to compete in Southeast Asia as Grab launched security features and took credit card payments, both things that Uber lacked. Uber, however, "feels like it's pushing a business model and an app designed in and for wealthier markets," Bloomberg wrote. This wouldn't be the first time that Uber sold off one of its international businesses. In 2016 it merged its Chinese division with local competitor Didi. Didi agreed to make a $1 billion (£713 million) investment in Uber at a $68 billion (£48 billion) valuation, and Uber China's investors ended up owning 20% of the merged Chinese company, which was valued at $35 billion (£24 billion). Uber CEO Dara Khosrowshahi said at the Goldman Sachs Technology and Internet Conference in San Francisco last week that Uber could sell off underperforming parts of its business in order to improve its finances ahead of an IPO in 2019. "Where we are now as of Q4 is the developed markets, the contribution from the developed markets, essentially pays for the overhead of the business, alright," Khosrowshahi said. "Now, I include two things. And they're a lot of money for those two things: One is the amount that we are investing in developing markets, that's a significant negative but that is an optional investment for us. By the way, we think it should be on, it's going to be on for a while, right? That gets us negative," he said. "And the big bets, autonomous etcetera also increase the negative. But if you just said, if someone says, 'Forget about all this stuff, all I want is the core and just sell all the stuff or stop investing all the stuff,' you would have a business that for a quarter was cash flow breakeven."
Ride-hailing service Uber could sell its struggling Southeast Asian business to rival Grab for an equity share, as the US company focuses on its 2019 initial public offering. The potential move follows recent comments by CEO Dara Khosrowshahi, who told the Goldman Sachs Technology and Internet Conference that "investing in developing markets is a significant negative but that is an optional investment". In a note published last week, Citi analysts said they expect Uber's valuation of $US1 billion ($A1.24 billion) would be boosted if it were sold off or split into two separate companies.