Uber’s decision to quit Southeast Asia shows that the shoot-for-the-moon startup is growing up

Uber's appreciating that the coldly-competitive capitalist world is not, in fact, its oyster

Uber has burned through a cash pile in excess of $10bn (£7bn) since it was founded in 2009 (Reuters)

As Uber enters its tenth year of existence, the Silicon Valley whizz kid seems to be learning one of the most valuable lessons of growing up and maturing: you can’t be everywhere all the time.

On Monday, the global ride-hailing company announced that it is selling its Southeast Asian business to rival Grab – no doubt a testing decision for a firm that over the last decade has demonstrated an aggressive desire to barge in and be the biggest and best across most corners of the planet.

Under the deal, Grab will swallow all of Uber’s operations in Cambodia, Indonesia, Malaysia, Myanmar, the Philippines, Singapore, Thailand and Vietnam, including food delivery business UberEats. Uber will end up with a 27.5 per cent stake in Grab, and the San Francisco-based company’s CEO, Dara Khosrowshahi, will get a seat on Grab's board.

Even though Khosrowshahi was quick to reassure staff in a memo that this does not signal that consolidation is the new “strategy of the day”, the move does appear to fit into a broader trend: a trend of rationalisation. Back in 2016, Uber sold its business in China – a thriving market with so much promise and potential – to Didi. Earlier this year it combined its services in Russia and neighbouring countries with Moscow-based Yandex.

The latest transaction was likely motivated by SoftBank Group, which is the largest investor in both Uber and Grab and has for some time been pushing to reduce competition in Southeast Asia, but it also indicates that Uber is transforming: it’s coming of age and it’s appreciating that the coldly-competitive capitalist world is not, in fact, its oyster.

What began as a shoot-for-the-moon startup, intent on making the biggest possible splash driven by grand ambitions to change the way we live our lives, is now demonstrating acumen and logic, sensibility and reason. Uber has burned through a cash pile in excess of $10bn (£7bn) since it was founded in 2009 but with plans to go public in 2019, Khosrowshahi is rightly recognising that things can’t go on like this. Now is the time to reflect on missteps and correct them before the financial haemorrhaging becomes unstoppable or irreversible.

In the memo to staff, the CEO – who took over from visionary yet reckless founder Travis Kalanick last summer—showed signs of admitting that his company might have been running the risk of spreading itself too thin.

“One of the potential dangers of our global strategy is that we take on too many battles across too many fronts and with too many competitors,” he wrote.

“This transaction now puts us in a position to compete with real focus and weight in the core markets where we operate, while giving us valuable and growing equity stakes in a number of big and important markets where we don’t.”

Khosrowshahi’s appointment to the top job in August was already welcomed by investors as Uber looked to turn a corner after a series of ugly, career-ending scandals. We’re now seeing his true value in even greater definition. During his 12-year reign at the top of Expedia he demonstrated a knack for knowing when to expand and when not to, a knack for choosing the battles that can be won, and it looks like he hasn’t lost that skill.

Pulling out of a region of 620 million potential customers will undoubtedly sting for a bit but arguably Uber has more important fights to concentrate on, not least a slew of regulatory hurdles in London and beyond.

Sometimes world domination has to take a back seat. Let's see how long Uber can resist.