After selling off its Chinese and Russian operations to local rivals, Uber is pulling out of yet another market.
This comes after Grab announced on Monday that it had acquired its American rival's operations in South-east Asia for an undisclosed amount, following several months of speculation.
David Kass, a professor of finance at the University of Maryland, said the deal with Grab is part of a broader strategy to make the company look as attractive as possible for potential investors.
While the group's CEO said that operations in Asia were not going to be "profitable anytime soon", Uber's performance is more promising among its core markets in US, Australia, New Zealand and Latin America, which are on the way to profitability.
In exchange, Uber will receive a 27.5% stake in Grab's business, a figure which Grab calls "reflective of the companies' respective market shares."?
Uber declined to comment and Grab, which has an estimated valuation of about US$6 billion (RM23.5 billion), declined to comment.More news: Google offshoot Waymo will launch driverless Uber competitor in Phoenix this year
Grab will integrate Uber's ridesharing and food delivery business in eight countries in the region into Grab's existing multi-modal transportation and fintech platform. Financial details were not revealed. That means commuters will still be able to use the separate apps of Uber and Grab for two more weeks.
"It will help us double down on our plans for growth as we invest heavily in our products and technology", Khosrowshahi said.
"Today's acquisition marks the beginning of a new era".
Khosrowshahi, who took over the top job at Uber in August, has been working to clean up the company's financials ahead taking it public.
Uber's official statement is of course trying to spin it positively, saying they were able to grow the business after investing $700 million in the region.
Uber's first such deal was with Didi in China.
The acquisition will boost Grab's competition against Go-Jek which is waxing strong in its local market, Indonesia and valued at $5 billion after Google's investment in the company earlier this year.