Uber rival Grab will announce a deal to buy Indonesian online payment startup Kudo for over $100 million. Pundits expect the move to help Grab provide its services to more people.
The money derives from a $700m commitment Grab planned to invest in the country.
Kudo handles online transactions for Indonesian customers. Its target market consists of people with no bank accounts and areas with small populations. These people receive help to buy goods online.
Grab is Uber’s biggest rival in the region.
Uber rival Grab and Kudo would not comment regarding the news. Grab’s only other purchase has been Youche, a Chinese startup, four years ago. This deal allowed Grab to expand into China.
Experts expect the competition to heat up as Grab expands. Grab worked with Lippo Group to start a mobile payment service. Customers can use the Grab app to make payments at Lippo’s stores.
Company officials said 80 – 90 percent of the Indonesian market lacks access to mobile payments or other modern personal finance tools. The company believes it can fill this niche.
Plus, Kudo will help it focus on a new region and buy goods online via an agent model. Kudo agents download the app to their Android phone and sell products to consumers via e-commerce sites.
Grab raised more than $750m in funding in fall of last year. Its valuation stands at $3 billion currently. Uber rival Grab and companies like it face more favorable conditions as consumer tastes change.
Interestingly, commuters report greater satisfaction using private-hire car services than taxis in Singapore.
Over 1,500 people gave an average score 7.9 out of 10. Taxis averaged a score of 7.5. Consumers reported better services in all areas surveyed. These include waiting time, ride comfort and safety.
The survey creators conducted the survey as taxi use fell slightly in recent years. This shows that the new ride share companies cater to new or unmet demand. Taxi ridership fell from an average of 967,000 riders in 2013 to 954,000 last year.
Now, Uber faces dilemmas across the globe as companies like Grab catch up. But Uber’s challenges are not new. We reported a few weeks ago about Uber and Lyft’s fights in Florida. Both companies want to make rideshare services legal around the world. Resistance came hard and fast in Florida.
Uber Rival Grab Succeeds, As Uber Struggles
According to Reuters, The state’s officials fought as Uber and Lyft made inroads in St. Petersburg.
Government officials there wanted to treat all taxi services equally. This did not please anyone. Uber and Lyft refused to pay a vehicle business tax. Taxi’s have done so for years.
Instead the company wanted to pay $5,000 each year for all its drivers in the county. At the time, rideshare company Uber said:
“We’re continuing productive conversations with Council around the vehicle-for-hire ordinance, including discussions about possible fee structures,” Lyft spokeswoman Chelsea Harrison said in an email. St. Petersburg’s per vehicle tax proposal doesn’t fit the company’s flexible business model, Fernandez said, in which 70 percent of drivers work less than 10 hours a week and new drivers come on board constantly. “We see it as an operational burden,” he said. Expect to here more about Uber’s legal battles across the globe.
Source: Venture Beat