UBER WILL AGGRESSIVELY INVEST IN SOUTHEAST ASIA, WON'T LET SOFTBANK RULE IT: CEO
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| Uber will aggressively invest in SE Asia won't let SoftBank rule it CEO |
Uber Technologies Inc’s
[UBER.UL] chief executive pledged to continue investing aggressively in
Southeast Asia even though the U.S. ride hailing firm expects to lose money in
the fast growing market due to costly battles with rivals such as Grab.
SoftBank’s 15
percent stake purchase in Uber last month has opened up the possibility of
combining Uber with other ride-hailing assets the Japanese group owns across
Asia. SoftBank has stakes in Singapore-based Grab and India’s Ola.
At the time of the
investment, SoftBank said it wants Uber to focus on growing in the United
States, Europe, Latin America and Australia - not Asia, which has been among
the most costly and competitive regions for the ride-services firm, a source
had told Reuters.
Uber is preparing to
sell its Southeast Asia ride-hailing business to Grab in return for a
substantial stake in the company, CNBC reported earlier this month, citing
sources familiar with the matter.
But Dara
Khosrowshahi seemed to dismiss that strategy on Thursday in his first official
visit to Asia since he became Uber CEO last year.
“We expect to lose
money in Southeast Asia and expect to invest aggressively in terms of
marketing, subsidies etc,” Khosrowshahi told reporters in New Delhi, adding there
is huge potential in the region thanks to a big population and fast internet
user growth.
“From a competitive
standpoint we think we can improve,” he said.
Khosrowshahi said
that a decade from now he expects 80 percent of growth at Uber to be organic
and some through acquisitions.
“We will look at
anything .... But right now the plan for Southeast Asia is to go forward, lean
forward and to invest.”
INDIA PUSH
Khosrowshahi said
SoftBank is an investor but Uber, which has a valuation of around $68 billion,
will take any final decisions along with the board on mergers and partnerships.
He said he does not expect any change in Uber’s India operations following the
deal with SoftBank.
India is one of
Uber’s fastest-growing international markets and accounts for more than 10
percent of Uber’s trips globally, but it’s not making money yet, Khosrowshahi
said.
Uber and India’s
market leader Ola have been locked in a fierce battle, pumping in millions of
dollars of investors’ money for a bigger piece of the country’s $12 billion
taxi market.
“The greatest value
that we can create here is to continue to invest and grow our business here,
not just for India but the role it is going to play in shaping our product for
the rest of the world,” he said.
Khosrowshahi
declined to comment on specific investments for India but said “it is a lot”
and will continue to increase.
“We as a company
need to have a balanced profile in terms of growth and investment. There are
developed markets that we are going to continue to invest in that are going to
be more profitable ... and we should actively be investing in markets like India
and Latin America that have huge growth ahead of us.”
Khosrowshahi, who
took the helm in August after former CEO Travis Kalanick was asked to step down
amid a litany of regulatory problems, driver and consumer scandals and court
cases, has pledged to make a clean break with past practices that have lead to
accusations of a toxic work culture.
Uber has faced bans,
restrictions and protests around the world as it disrupts conventional taxi
services and Khosrowshahi is tackling this head-on by working with regulators,
putting an end to the take-no-prisoners culture he inherited.
He said that the
company has a responsibility to local governments and regulators, and it needs
to have a dialogue with them.\
SOURCE: REUTERS
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