|ComfortDelGro to Buy 51% in Uber Singapore Car Rental Unit|
By Yoolim Lee
December 8, 2017
-- Uber will retain remaining 49% in the Singapore joint venture
-- Deal marks ComfortDelGro’s single largest deal to-date
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ComfortDelGro Corp., Singapore’s largest taxi company, struck a deal to buy 51 percent of Uber Technologies Inc.’s Singapore car rental unit for S$295 million ($218 million) in cash and form a joint venture with the ride-hailing giant.
The deal for Uber’s Lion City Rentals will give ComfortDelGro control of a fleet of about 14,000 vehicles in the city-state, with the acquisition to be financed from internal funds, the Singapore-based company said in a filing after the market close on Friday. Uber will retain the remaining 49 percent.
Under the agreement, ComfortDelGro taxi drivers will be able to receive ride requests on the Uber driver app, while allowing users of Uber’s app to directly book ComfortDelGro taxis. The move follows a year in which Grab, which competes head-to-head with Uber across seven countries in Southeast Asia, expanded its market share in private-vehicle rides to 72 percent.
Uber drivers in Singapore typically rent their cars from the company because vehicle costs in the country are among the world’s most expensive. The 51 percent that ComfortDelGro is buying is valued at about S$642 million, including cash and loans, according to the taxi company.
ComfortDelGro said in August it signed a letter for exclusive discussions with Uber for a potential alliance. Its shares have lost about 11 percent of their value since then as investors lost patience with the plan. They closed Friday at S$1.91, down 1.6 percent.
Grab President Ming Maa this week said Uber is “under siege” from multiple rivals in multiple geographies for the first time this year. Uber agreed in July to merge its operations in Russia and neighboring ex-Soviet republics into a joint venture, the second retreat from a major market by the San Francisco-based company. Last year it ceded China to rival Didi Chuxing in exchange for a minority stake.