Ride-hailing firm Uber Technologies Inc announced it had agreed to sell its Southeast Asian business to bigger regional rival Grab on March 26th, marking the U.S. company’s second retreat from an Asian market. Uber will officially leave Vietnam on April 8.
Uber will take a 27.5 percent stake in Singapore-based Grab and Uber CEO Dara Khosrowshahi will join Grab’s board. Grab was last valued at an estimated $6 billion.
Customers and drivers are both worried that Grab’s acquisition of Uber’s Southeast Asian business will reduce competition, resulting in higher fares and fewer incentives.
A Grab spokeswoman said all Uber employees in Southeast Asia will be offered employment by Grab.
News of Grab’s successful bid to acquire rival Uber’s Southeast Asian operations shook the media on March 26th, but an official from the Ministry of Transport has tried to calm fears by saying the company is unlikely to gain a monopoly in Vietnam.
Tran Bao Ngoc, head of the ministry’s Transport Department, was speaking at a quarterly press conference on Thursday, where he explained that there are other firms offering the same service as Grab in Vietnam besides the now-irrelevant Uber, such as ViVu, Mai Linh Bike and Go-Jek.
He also said that it is up to the Ministry of Industry and Trade to determine whether a firm holds a monopoly in Vietnam’s market, and that mergers and acquisitions can be carried out with each company’s consent as long as they are within the confines of Vietnam’s Law on Enterprises.
The Ministry of Transport and Vietnam’s Competition Authority have asked the two firms to supply relevant documents regarding the multi-billion dollar transaction, Ngoc said, adding that the government has sworn to protect the rights of all parties involved, especially the Vietnamese people, and that a monopoly won’t be happening under its watch.