Uber has reportedly considered exiting the Indian market, holding preliminary talks with interested parties to explore what options could it have on this note.
A Bloomberg report on this matter, citing anonymous sources, states that Uber had held meetings with potential buyers of its India business – before a global economic downturn and decline in the equity markets led to the idea being shelved.
If such a move would have come to fruition, it would have seen Ola Cabs being left as the only cab aggregator brand in India – unless a new operator continued Uber’s business by either licensing its brand name or operating under a new umbrella altogether.
The sources quoted by Bloomberg also said that the talks around a sale of Uber’s Indian arm had been preliminary and the cab aggregator could decide not to revisit those options.
The US company began weighing alternatives and reached out to several interested parties after recognizing it had limited potential for profitable expansion in the country, the people said, asking not to be named as the information is not public.
It pondered a stock swap with local companies or even a pullout before a global equity market rout upended plans, the people added. A stock deal was favored in exploratory talks as that would allow Uber to retain a foothold in India, the people said.
Uber and its local-rival Ola had been struggling to eke out a profit in a rapidly growing but price-sensitive market, where constant driver attrition was pressuring margins.
A sale to a local operator could have mirrored similar deals it struck with Didi Global Inc. in China and Grab Holdings Ltd. in Southeast Asia, where Uber ceded the markets but kept an equity stake in the dominant local player to tap future growth. The maneuvers ended costly turf wars waged with driver incentives and cash subsidies.
Uber said on Thursday it has never explored exiting India, a key overseas market for several tech giants, dismissing a claim that it has had held discussions to sell the local unit.
“Bloomberg’s reporting is categorically false. We have never explored exiting India — not even for a minute,” company spokesperson Ruchika Tomar said in an emailed statement, according to the report by the news agency. Uber remains committed to India and continues to hire people “aggressively,” the company said.
Uber, whose shares like those of many other tech firms have tanked in recent quarters, competes with SoftBank-backed Ola in India. Both Uber and the Bengaluru-headquartered startup, valued at about $7.3 billion, claim tentpole position in the country.
Uber chief executive Dara Khosrowshahi told employees last month that the firm is focused on reaching profitability. The firm, which is not profitable in India, according to a person familiar with the matter, sold the India unit of Uber Eats to food delivery firm Zomato in early 2020.
An Uber spokesperson did not immediately respond to a request for comment about its India finances.
Uber also sold its food-delivery business in India to local rival Zomato Ltd. in 2020 in return for a stake in the local startup. The US giant now competes mainly with Ola, which had selected bankers to prepare for an initial public offering in Mumbai, Bloomberg News reported last year.
Uber announced in May that it would add 500 tech workers this year to its Bangalore and Hyderabad engineering centers