Uber has sold off it’s Southeast Asian ride-hailing business to Grab, in what appears to be the biggest play out against Temasek Holdings.
Earlier in Dec 2017, Temasek Holdings-owned transport operator ComfortDelgro have wasted S$642 million buying over Uber’s Singapore arm, Lion City Holdings, to acquire the access of Uber application usage.
Probably one of the worst business decisions made by Ho Ching, Lion City Holdings have a S$1 billion debt position as of Dec 2016. The S$642 million grants ComfortDelgro over 51% of Lion City Holdings, a car-rental arm in Singapore owning around 14,000 rental cars. The purchase of their competitor means ComfortDelgro paid for over S$91,000 per rental car, deemed by many business analysts overpriced for the depreciating assets.
To worsen the damage, ComfortDelgro drivers did not see an increase in their income and reception of the Uber app is lukewarm. According to Uber, 30% of the drivers dropped out after using the app for a week due to lower earnings.
The merger of the two major ride-hailing applications would also mean that Grab now have a monopoly over Singapore and price hike is almost a certain to recover the expenses spent on the takeover.
The current CEO of Temasek Holdings is the wife of Prime Minister Lee Hsien Loong, Ho Ching. Nepotism has kept the eccentric dragon lady as the sovereign wealth fund company’s CEO for over 15 years, with no sign of replacement in sight despite record losses.