Cab service aggregator Uber Technologies Inc. has reportedly explored options for its ride-hailing business in India — including a sale. As per a new report quoting people having knowledge on the matter, authorities of Uber suspended the discussions following the collapse of tech startup valuations. The news comes at a time when Uber, along with its Indian rival Ola, is facing trouble to make profit in India despite having a growing market.
According to a report by Bloomberg, the United States-based company had begun mulling alternate options and reached out to multiple interested parties after it realised that it had little potential for profitable expansion across India. According to the news agency, the people, who did not ask to be named, also said that Uber weighed in on a “stock swap with local companies or even a pullout”, before the plans were upended by a global equity market rout. “A stock deal was favored in exploratory talks as that would allow Uber to retain a foothold in India,” the people said, as per the report by Bloomberg.
Along with its India-based rival Ola, Uber had also been facing issues with making profit in a rapidly growing but cost-sensitive market, coupled with constant driver attrition that put pressure as well. If the company went for a sale route, it would have been similar to its actions in China and South east Asia, where Uber had exited the markets while keeping an equity stake in the dominant local player to keep options open if there was a potential for growth.
However, Uber vehemently denied the report that it had planned to exit the Indian market
“Bloomberg’s reporting is categorically false. We have never explored exiting India — not even for a minute,” company spokesperson Ruchica 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.
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.
India and Japan are the only two major remaining Asian markets for Uber, which have receded sharply ever since the tumultuous days of the company’s former chief Travis Kalanick. The shares of Uber have gyrated since it went public in 2019. In May this year, the company delivered a positive earnings outlook for its global business.
Two years back, in 2020, Uber also sold its food-delivery business in India to local startup Zomato in exchange for a stake in the Deepinder Goyal-led company. he San Franciso-based company started services in India in 2013 and has since been operational across 100 cities over the country, as per data from its website.