Toyota Takes Stake In Grab as Uber's Asia Challenges Intensify - TheStreet

Grab, the ride sharing company that's challenging Uber Technologies in Asia, secured its second major investment in as many months Wednesday after the world's biggest carmaker said it would take a stake in the Singapore-based group.

Toyota Motor Corp. (TM) - Get Report investment arm, Toyota Tsusho Crop., said it has taken an undisclosed stake in Grab through its Next Technology Fund, a $55 billion division is established earlier this year to identify next-generation automobile-related businesses opportunities. The Toyota investment follows a $2 billion investment from Japan's SoftBank (SFTBY)  and China's Didi Chuxing in July that valued GrabTaxi Holdings Pte Ltd. at just over $6 billion.

"With advancements in digital technologies and increased use of smartphones and other mobile devices over recent years, many countries and regions around the world have seen a rapid increase in the adoption of on-demand transportation services, such as ride-hailing services and taxi dispatch services," Toyota Tsusho said in a statement. "New transportation services like these have expanded rapidly across Southeast Asia where they are quickly taking hold as a new mass transportation medium, particularly in countries where the public transport infrastructure remains underdeveloped."

Toyota also said it would install its 'TransLog' recording devices in around 100 of Grab's rental cars in order to studly driving patterns with the aim of offering connected services. 

Grab's latest investment win could put further pressure on Uber, which has already retreated from markets in China and Russia, and now faces a much-stronger rival in Grab as well as an established player in Go-Jek, which dominates the ride-sharing market in Indonesia thanks in part to a $550 million investment from private equity groups KKR & Co. and Warburg Pincus LLC.

Grab, which says it handles 3 million rides each day, now claims a 95% market share in third-party taxi hailing in Southeast Asia, according to a July statement, and a 71% share of private vehicle hailing.

With Uber slowly losing ground in key Asia markets while facing increasing legal and political challenges in Europe, new CEO Dara Khosrowshahi will need to quickly address the company's international strategy as he also attempts to repair the group's toxic corporate culture that led to the ouster of founder and former CEO Travis Kalanick earlier this year. 

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