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Is India On Uber’s Radar For Regions It Will Exit?

On his maiden trip to India, Khosrowshahi had emphasised that India was important to Uber’s ride-sharing and food delivery businesses

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The US-based ride-sharing, food delivery and transportation company, Uber Technologies has sold its ride-hailing and food delivery businesses in Southeast Asia to its Singapore-based rival, Grab. Grab will now take over Uber’s operations in the region and Uber will get a 27.5 per cent stake in Grab and have Uber Technologies CEO, Dara Khosrowshahi, on its board.

The US unicorn has already retreated from China and Russia. The divestment of its operations and assets from Cambodia, Indonesia, Malaysia, Myanmar, the Philippines, Singapore, Thailand and Vietnam will thus be Uber’s third exit from a region.

In India, where Uber driver-partners are often not supportive and frequently on strike, speculation is rife about its plans for the country. A possibility also exists of Uber preferring to merge with a local partner, like Ola. Both Ola and Uber have a common investor on their boards, namely Softbank. 

Automobile industry experts say though, that despite the rumblings, Uber will keep on investing its resources and energies in India, where mobility has been redefined by ride-hailing companies. Says Puneet Gupta, Associate Director at global automotive sales forecasting firm, IHS Markit, “India is one of the rare countries where mobility is the key. This is because firstly public transportation is very pathetic. Secondly, the numbers of cars per 1,000 people stands at 32, which is very low. Going forward, when vehicles (per thousand people) go up and more people move towards urban markets, mobility players like Uber will play a critical role in shaping up the country.”

It may be recalled that on his maiden trip to India, Khosrowshahi had emphasised that India was important to Uber’s ride-sharing and food delivery businesses, as well as for sourcing talent. He was quite emphatic that Uber would continue to invest heavily in India across people, products and partnerships. He is reported to have said, “Hiring local engineers to build products for India that can then be exported to other fast-growing markets is a key focus in 2018 and beyond.”

“The best part of  India is that since the density of population is very high, it makes a lot of  sense for taxi aggregators to invest in India,” says Gupta. “And Uber will obviously place their best bet on India because of these fundamental reasons,” he says, adding, “Today, our government is also very convinced that taxi aggregators can play a critical role for job creation.”

Industry analysts reckon that the most prudent move for Uber would be to boost its valuations ahead of an IPO lined up for next year. But for that, it has to improve its bottomline in all its key markets, including India.


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uber Magazine 31 March 2018
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