When is it possible for David to beat Goliath in the platform economy? On March 25 mighty Uber bowed out of Southeast Asia by selling its operation in several countries to local rival Grab. The news came as a surprise to many observers. Grab, which launched its service in 2012 with 40 drivers in Malaysia, came late to the ride-hailing game, only after Uber had established a formidable position in the United States. Three months after the sale, in June 2018, Toyota decided to pour $1 billion into Grab, in a bid to expand other offerings in the region including food delivery and electronic payments.
For Some Platforms, Network Effects Are No Match for Local Know-How
Consider Uber’s failures in Southeast Asia.
July 26, 2018
Summary.
When is it possible for David to beat Goliath in the platform economy? On March 25, mighty Uber bowed out of Southeast Asia by selling its operation in several countries to local rival Grab. In the internet economy, we often see winner-take-all dynamics, meaning one company dominates its sector. But Uber versus Grab shows that platforms whose product is physical (rather than digital) have to embrace localization in order to succeed. When Uber rolled out its standard app for customers in Southeast Asia, Grab rolled out features that solved the local challenges those customers faced — and reaped the rewards.
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