Ride-hailing service Uber Technologies will sell its business in Southeast Asia to regional rival Grab, the firm said in a statement early Monday, ceding the region's 640 million potential riders to others.
Grab is a rapidly expanding ride-sharing, food delivery and financial services provider in the region. Uber said it would take a 27.5 percent stake in Grab as part of the deal, according to Reuters.
The sale comes two years after Uber merged its operations in China with rival Didi Chuxing, when it also took a share in that company.
Margins are notoriously low on ride-sharing services in Asia, where such firms rely heavily on discounts and promotions, according to Reuters.
"It will help us double down on our plans for growth as we invest heavily in our products and technology," Uber CEO Dara Khosrowshahi said in a statement.
Uber has been struggling to stem increasing losses, which amounted to $4.5 billion last year, as it also tries to tamp-down corporate scandals and an internal shakeup that replaced its CEO, Travis Kalanick.
As The Associated Press writes: "Since becoming CEO last year ... Khosrowshahi has been maneuvering to make the company profitable before a planned initial public offering expected next year."
Grab President Ming Maa told Reuters that the deal "was really a very independent decision by both companies."
Grab has locked horns with its own regional rival, Go-Jek, which is backed by Alphabet Inc.'s Google and China's Tencent Holdings Ltd.
Reuters writes: "For Grab, the deal is a boon for its meal-delivery service, which will now merge with Uber Eats. A more robust food service will give Grab an advantage over Go-Jek, according to a person close to Grab."
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