Last year, after global car-hailing platform Uber closed a massive $10 Bn funding from SoftBank for a 15% stake, there were news reports of a possible exit by Uber from India to minimise market competition with Ola in the Indian market. SoftBank now owns the largest stake in both the car-hailing platforms, Ola and Uber.
However, looking at the enormous size of the Indian market and the small number of players in the car aggregation space here, both will continue to compete with each other.
After Uber’s exit from China, India is now its priority market. Speaking to Livemint, Uber COO Barney Harford said that Uber has a clear position of strength in India. After the Grab deal, Uber will continue to increase the resources it invests in opportunity markets and India is right on top of that list.
“We have an indefinite investment horizon in India. The market opportunity is so significant that we’re not focused right now on how can we get this business to profitability. If you overlay the GDP growth potential in India (with the transportation market potential) it absolutely makes sense for this to be one of the markets we’re investing in over the long term. The logic imperative to invest in India over the long term is very clear. We’re confident that we’ll be able to articulate that and the investors who choose to invest in Uber will be investing with that understanding,” he added.
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However, as per the report, India is still way behind leading cab-hailing markets in the world including China, US, UK, and many other markets. With a gross booking value of $2.1 Bn in 2017, Uber’s India business is smaller than its business in even San Francisco. The booking value difference is also impacted by the depreciating value of the Indian rupee against the US dollar.
But Uber, which has completed 500 Mn rides in the last four years in India, still feels India is an attractive market because of the volume of business here and future potential.
Having exited from China and now Southeast Asia, Uber is facing tough times in other markets as well. As per The Information, Uber is losing out to local players in most markets.
While in India, Ola claims to command over 60% of the ride-hailing market, in Brazil, local cab drivers continue to protest, threaten, and prosecute Uber drivers, and the latest legislation will turn Uber drivers into regular taxi drivers.
Back in India, Uber is launching innovative offerings to keep up with Ola. Some such offering are Uber Access and Uber Assist for senior citizens and physically challenged riders, which offers wheelchair assistance. Similarly, Uber has also introduced UberEats in some of the leading city markets in India.
At a time when the local, homegrown Ola is going global having launched its services in Australia, and is planning to expand to other markets as well, Uber India, with its enriched state-of-the-art R&D in Bengaluru, is focusing on more innovative offerings in the local market. It also plans to take the offerings and technology to other developing country-markets as well.