People familiar with the matter said Uber Technologies Inc. explored options for its ride-hailing business in India, including a sale, but discussions were suspended following the tech startup’s valuation.
People familiar with the matter said Uber Technologies Inc. explored options for its ride-hailing business in India, including a sale, but discussions were suspended following the tech startup’s valuation.
The US company began considering alternatives and contacted a number of interested parties after realizing that the potential for profitable expansion in the country was limited, the people said, requesting anonymity because information is not made public. They considered swapping shares with local companies or even cashing out, before the global stock market implemented unfinished plans, the people added. A stock deal is favored in the exploratory talks because it would allow Uber to retain its foothold in India, the people said.
Uber and local rival Ola have struggled to turn a profit in a rapidly growing but price-sensitive market, where constant driver attrition is putting pressure on profit margins. A sale to a local operator may reflect similar transactions it has made with Didi Global Inc. in China and Grab Holdings Ltd. in Southeast Asia, where Uber cedes the market but retains a stake in the dominant local company to tap future growth. The maneuvers ended costly turf wars with driver incentives and cash subsidies.
Uber countered the idea that it had considered pulling out of India.
“The Bloomberg report is clearly wrong. Company spokeswoman Ruchica Tomar said in an emailed statement. Uber remains committed to India and continues to hire people “actively”.
Uber, whose stock has plummeted since its IPO in 2019, has been helping loss-making businesses achieve their goal of steady profitability. In May, it issued a positive earnings outlook, suggesting the company plans to capitalize on strong ride-hailing demand without hurting profits by focusing on product changes, instead of incentives, to address the driver shortage.
India and Japan are Uber’s only remaining major Asian markets, which have scaled back sharply since the tumultuous days of former chief Travis Kalanick. The San Francisco-based company started offering services in India in 2013 and now offers ride-hailing in nearly 100 cities around the country, the company’s website says.
Conversations around a deal with India are preliminary and the company may decide not to revisit those options, the people said.
Uber also sold its food delivery business in India to local rival Zomato Ltd. in 2020 in exchange for shares in the local startup. The US giant currently competes mainly with Ola, which has selected bankers to prepare for its initial public offering in Mumbai, Bloomberg News reported last year. In May, Uber announced that it would add 500 tech workers this year to its Bangalore and Hyderabad engineering centers.
