At a time when Uber is facing increasing competition with Ola in Australia, the global cab aggregator’s chief, Dara Khosrowshahi, has reportedly said that the company will continue to reinvest in its products and technology, along with emerging markets like India and the Middle East.
In an email to employees, the newly instated CEO said that the company’s core business has been performing well and the number of trips on the platform increased by 43% and bookings grew by 55% to $11.3 Bn year-on-year.
Khosrowshahi further said that the company’s net revenue grew 67% to $2.5 Bn, while it cut losses to half compared to a year ago.
“We are deliberately reinvesting our profits. Even with these impressive results, we’re not going to let up on the gas. We expect to reinvest our profits back into our products and tech, emerging markets like the Middle East and India, as well as big bets like scaling Eats and JUMP globally,” Khosrowshahi added.
Further, he stated that it would hold a secondary stock sale for employees and existing investors.
“…a new third-party tender offer led by Coatue, TPG, and Altimeter Capital will launch next week. Eligible employees will be able to sell shares to these investors at $40 per share, which implies a valuation of approximately $62 Bn,” he said.
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The Uber chief also added that the company is committed to investing further in the Indian market, but it is also keeping an eye on “eventual profitability” as it looks to ramp up its services.
Uber: Challenging Ola In India And Beyond
With Ola expanding its operations in Australia with 20% lesser commission compared to Uber, the company has been struggling with its operations in one of its key markets.
However, it is also to be noted that it recently exited the difficult Southeast Asian market by selling its Southeast Asian arm to Grab and taking a 27.5% stake in the enlarged group.
In the last two years, it has also left some of its biggest emerging markets. In August 2016, it sold its China business to rival Didi Chuxing.
Similarly, in July last year, the company called it quits in the Russian market. The cab aggregator announced a $3.7 Bn merger deal with its Russian rival Yandex.Taxi, which is owned and operated by the Baltic search engine giant Yandex.
For Uber, India is already among the top three markets (besides the US and Latin America) and therefore, it has been pumping in substantial funds to fuel its growth in India.
The filings with the Registrar of Companies showed that in July last year, the cab aggregator poured $7.99 Mn (INR 51.64 Cr) into its India business.
Uber India’s services in 29 cities are in sharp contrast to its Indian rival Ola which operates in more than 90 cities. Globally, it provides its services in 600 cities. Recently, it also rolled out features like the Driver Partner app, ‘Request for a guest’, ‘Call to ride’ and an AI-enabled offline search facility for its Indian users.
Dara Khosrowshahi: Saving Uber
Dara Khosrowshahi took over as the CEO of Uber in August 2017, after the Uber board made founder and ex-CEO Travis Kalanick resign from his position. This was the time when Uber was fighting a battle on both internal and external fronts.
Uber had been trying to reassure regulators after battling controversies which damaged the firm’s reputation and led to the exit of the-then CEO and co-founder Travis Kalanick.
Since Dara Khosrowshahi took charge, he has been on the offensive to save Uber’s image. The assurance came when the company recently finalised a deal with SoftBank Group, its largest shareholder, to take a 17.5%stake in the company.
During his India visit, Khosrowshahi also said that Uber is very serious about its business in the Indian market and that India falls in its core business domain.
With a continuous focus on India and expansion plans of Uber EATS and JUMP, CEO Dara Khosrowshahi has been fighting hard for Uber’s sustained growth and presence in the country.