Grab setup $700 million for car rental business

Grab setup US$700 million for business expansion in rental vehicles. The technology company on Friday announced a fundraiser that allows it to build fleet from scratch, build partnerships with several local service providers or may acquire as part of its subsidiaries.

Grab setup $700 million for car rental business

The on-demand transport service announces plan for expansion in the car rental business with an investment value of US$700 million to continue to compete Uber and Go-Jek in Southeast Asia. So far Grab has not revealed details of what strategy they will apply to start expanding this new business.

The new fund allows Grab to collect fleets from scratch, build collaboration with several local service providers in each country in Southeast Asia or also acquire as subsidiaries. Grab in Indonesia has collaborated with PT. Teknologi Pengangkutan Indonesia (TPI) to recruit drivers who do not yet own a car.

The Grab and TPI collaboration allows drivers to rent a car for Rp200,000 (US$14.8) per day including modem, cover seats, insurance, and GrabGold membership where they get a higher order priority than the regular Grab account owner drivers.

The systematic fleet rental of such vehicles could be a strategy for Grab, Go-Jek and Uber to keep strong of the regulations applied by governments in many countries. The new rules further strengthen the online taxi companies to also build strength in conventional taxi services at once.