Uber CEO, Dara Khosrowshahi, who is on his maiden trip to India, is positive about further investing in the country as rhe company intensifies its battle against homegrown rival Ola. He also put to rest speculations about a merger between the two ride-hailing companies, by saying, “it is fun to speculate about” such things.
In India, Uber and Ola are fighting for the top spot, and amidst the competition, there are bound to be some losses. Both the companies have had their shares of driver protests, government oppositions, along with incumbent taxi services raising concerns over loss of business. However, these private services have been able to maintain their foothold by playing the ‘environment-friendly ride-sharing’ cards well.
As for its plans for India, Uber will utilize the profits it makes in markets of the US and Europe to balance the losses of its Indian business. Khosrowshahi is quoted as saying during an ET Now interview, “I think we’re going to be quite aggressive in India as far as investment goes. One of the great structural advantages that we have at Uber is that we have many profit pools. Those profit pools in the mature markets in the US and Europe, allow us to actually lean into some of the developing markets”.
According to a report on the Business Standard, Uber and Ola, both have lost billions of dollars over the past four years in subsidizing rides for customers and paying incentives to drivers. While Uber leveraged its global advantage and funding it raised, Ola did so solely on the basis of the equity capital it raised from investors Softbank and Tiger Global. Now, as Softbank is a common investor in both firms, it was speculated that the companies will eventually join hands with Uber selling off its India unit to Ola for a major stake in the company.
However, Khosrowshahi dismissed the speculations saying such a deal is not on the charts. “My focus is on our quality of operations and our teams, that’s why I’m here. I’m here to meet with our teams, ministers, etc, to understand the market, and at this point I’m not really focused on M&A, although it’s certainly fun to speculate about,” he is quoted as saying.
When it comes to the vision of the companies, interestingly, both Uber and Ola want to move beyond offering just cab-hailing services. Ola already offers diverse transportation options, including autorickshaws, motorcycles, and bicycles. Uber, on the other hand, has only recently ventured into offering auto rides.
Khosrowshahi, who took over the controversy-ridden company from Travis Kalanick in August last year, recently expressed his desire to make Uber a transportation company and not just an app for booking cabs. “I want to run the bus systems for a city,” he is quoted as saying in an earlier media report, adding, “I want you to be able to take an Uber and get into the subway… get out and have an Uber waiting for you.”
On the other hand, Ola CEO Bhavish Aggarwal has similar plans for the company which has already experimented with running a fleet of buses in some Indian cities. In January, the company announced that it will make its international debut by rolling out its services in Australia in early 2018.