Grab, ofrmerly GrabTaxi, one of Uber’s main competitors in Southeast Asia, announced on Friday plans to partner with nuTonomy, a MIT spin out that last week received clearance to trial a self-driving shuttle service in Singapore’s one-north district.
It provides Grab with a neutral partner in the self-driving battle, though neither firm can manufacture an automotive. As I’ve wrote previously, this may become a necessary requirement to compete in ride-hailing.
Grab CEO Anthony Tan expressed interest in a self-driving partnership in May. Apparently, the two firms were already in talks, which were solidified earlier this month.
The exact terms of the partnership have not been disclosed. From what we can tell, nuTonomy will provide its self-driving system to Grab, in return for a share of Grab’s ride-hailing profits.
Grab already well-established in region
Grab is active in 30 cities across the Southeast Asia region, including Singapore. It might be possible that we are seeing the early stages of a merger, since Grab could easily provide the self-driving shuttle service that nuTonomy wants to launch in 2018.
The two firms may need a closer partnership, as Uber ramps up its spending in the Southeast Asian region. After selling Uber China to Didi, CEO Travis Kalanick said the ride-hailing giant, valued at $69 billion, will now be able to spend more in the region.
Uber has already made big steps in the self-driving market, acquiring self-driving truck startup Otto for $680 million and adding 100 modified Volvo SUVs to its self-driving Pittsburgh fleet. It also partnered with Hyundai in South Korea, also focused on self-driving.
Ride-hailing services are going to become much more valuable as the automotive industry moves from an ownership to shuttle and lease business model. But automotive manufacturers don’t seem happy with the current outlook, and some, like Ford and General Motors, are apparently building their own ride-hailing services to compete.