Uber, in a bid to take on its homegrown rival Ola, has invested $6.4 Mn (INR 43 Crore) in Mumbai-based car leasing firm Xchange Leasing India Pvt. Ltd between January and March this year.
The company received INR 10 crore in January and INR 32.99 Crore in March, from Uber International Services Holding B.V and its subsidiary Mieten B.V, as per documents filed with Registrar of Companies.
The company announced in March to invest $500 Mn to boost Indian operations by June.
Uber started with its leasing business globally in 2013, In India, it got associated with Xchange leasing in December 2015. Both companies have Mohd Akbar Khan as common Director, and it also operates with Uber in the US and South Africa. Presently, Uber drivers have to pay INR 30, 000 – 35000, to be part of leasing program and then monthly lease payments with an option to own the vehicle after three year.
Related Article: Uber Pumps $30 Mn In Xchange Leasing; Looks To Strengthen Supply
Ola on the other hand, began with the leasing program initially in September last year, thereby allowing its drivers to borrow taxis at cheaper interest rates. Ola further plans to invest INR 5000 crore over leasing program in the coming year.
Leasing cars help both ola and uber to retain drivers exclusively on their platform, as many drivers today are using 3-4 cab services.
Ola has raised a total of about $1.2 Bn so far, including $500 Mn in November from investors including China’s biggest taxi aggregator Didi Kuaidi that is building a global alliance against Uber. At the time, Ola was valued at $5 Bn.
Last month, Toyota Motors invested an undisclosed sum in Uber. This strategic investment also allowed Uber drivers to lease their vehicles from Toyota and cover their payments through earnings generated as Uber drivers.
Both Ola and Uber get more than 70 per cent of their revenue from Bengaluru, Hyderabad, Chennai, Delhi-National Capital Region and Kolkata. The companies are seen to be fighting fiercely to hold majority share of the $1.4 Bn online car rental market in India. Recently, Uber alleged that Ola employees and agents are making false bookings on its app and also filed a $7.5 Mn lawsuit on Ola.
Acting on the complaint, Delhi High Court has issued a notice to OLA cabs over Uber’s plea alleging interference in business activities. The next hearing of the case is on September 14, 2016.
The development was first reported by Mint.