Can ComfortDelgro Investors Win When Grab Buys Uber?

Can ComfortDelgro Investors Win When Grab Buys Uber?

It’s official: Uber has just sold its Southeast Asian business to rival Grab.

 

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Following the sale, Uber will have a 27.5% stake in the combined business.

Grab will be integrating both of Uber’s ridesharing and food delivery business in SEA into Grab’s existing platform.

Just a few months ago, local taxi company Comfort Delgro announced that comfort cabs can be booked within the Uber app. Comfort cabs can also be booked through the UberFlash service, promises faster rides by matching commuters with the nearest UberX private-hire car or Comfort Delgro taxi.

As part of the agreement, Uber takes a 10% cut of the fare from ComfortDelgro cabbies from each booking.

ComfortDelgro also formed a joint venture with Uber in 2017, with a 51% stake in Lion City Rentals, an Uber subsidiary in Singapore that leases cars to its drivers.

Currently at the time of writing on 26th March, ComfortDelgro is up 4% on the news of Grab’s acquisition.

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One of our veteran community members and blogger, @gingwien, states that “in the short term, this piece of news might not bode well for ComfortDelGro.”

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Grab will be migrating Uber drivers and riders, Uber Eats customers, merchant partners and delivery partners to the Grab platform. The Uber app will continue to operate for two weeks to ensure stability for Uber drivers.

As the acquisition formalises in the upcoming weeks, it will be interesting for ComfortDelgro investors to find out how this deal between two of the biggest ride-hailing, private companies will affect the publicly-listed ComfortDelgro.

ComfortDelgro was also top most-discussed stock in our community in 2017.

Now that you’ve got the news, see how other investors are reacting to it here.


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