Ride-hailing firm Grab follows Uber into Cambodia

PHNOM PENH (Reuters) - Ride-hailing firm Grab on Tuesday launched services in Cambodia, expanding its presence to an eighth country in Southeast Asia as it looks to cement its regional dominance over rival Uber Technologies Inc [UBER.UL].

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The Singapore-headquartered firm’s expansion into Cambodian capital Phnom Penh, its 156th city in the region, comes just three months after Uber began services in what the World Bank ranks as the sixth-fastest expanding economy.

Uber is present in around 60 cities in Southeast Asia but a planned investment by Japan’s SoftBank Group Corp - which owns stakes in ride-hailing firms across Asia, including Grab - has opened up the possibility of consolidation in the fast-expanding sector.

“Southeast Asia is our home and our goal is to improve lives here,” Grab co-founder Tan Hooi Ling said at the launch in Phnom Penh, where Grab signed an agreement with the Ministry of Public Works and Transport to support infrastructure development.

Chris Brummitt, Uber’s Asia-Pacific head of corporate and product communications, declined to comment on Grab’s Cambodia launch.

The arrival of Grab and Uber threatens to stifle local firms offering ride-hailing services in a city where locals favor public buses and motorcycles, and where hotels regularly arrange unmarked, unmetered taxis for tourists.

“It’s hard for us now as a local company,” said Soy Theara, executive representative at local ride-hailing firm Exnet. “Uber and Grab have more promotions for their passengers”.

Sun Chanthol, senior minister at the transport ministry, told reporters at Grab’s Phnom Penh launch that so far 500 local drivers have registered with the firm.

“Our ministry also recognises that technology can improve, and can also deliver, public services in a transparent manner, faster, and can cut down on bureaucracy to serve our citizens better,” said Sun Chanthol.

Grab said across Southeast Asia its drivers earn on average one-third more per hour compared with average worker wages.

Rushabh Doshi, an analyst at researcher Canalys in Singapore, said Grab’s experience in Vietnam - which like Cambodia has a low level of car ownership - and government approval should help its chances of expansion in the country.

Grab said it has a market share of 95 percent in third-party taxi-hailing in Southeast Asia and 72 percent in private vehicle hailing. In October, it said it had secured $700 million in debt financing to expand its fleet across the region.

Its challenge to Uber in Cambodia comes as Chinese peer Didi Chuxing on Tuesday said it is considering entering Taiwan, where Uber already has a presence.

Reporting by Prak Chan Thul; Additional reporting by Amy Sawitta Lefevre, Aradhana Aravindan and John Geddie; Editing by Himani Sarkar and Christopher Cushing