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Travis Kalanick’s resignation could have big impact on Uber's India foray

Will Ola make the most of this opportunity?

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Uber, the company which is believed to have revolutionized the public transport, has of late gone through a series of turmoil, ranging from drivers protests to shady working atmosphere within the organization. After the exit of a series of top executives, the company is now looking to revive. For its new journey, it is looking for a new leadership as co-founder Travis Kalanick has stepped down. While all this is happening in the US, the company also has to ensure its aggressive global strategy remains undeterred. However, Kalanick s exit has raised apprehensions in its units in key markets, especially India.

An ET report cites anonymous Uber India employees who reveal the growing scepticism within the company. There has been a meltdown internally after we heard Travis was resigning from the post of CEO. Literally all of us feel like we are just hanging in there, hoping that the new management will continue to keep India as a top priority for Uber, just like the previous top-level management did, an employee is quoted as saying.

The employee also reveals that Indian unit had always been informed about key decisions within the company, however, this time they weren’t up-to-date. Though the person also said that the India unit was very attached to Kalanick, and loved his style of working, even though it may not be really termed as professional.

He definitely has a major fan following. Many of us worshipped his go-getter attitude, hell bent on innovation and changing the way transportation worked, despite going against the regulatory authorities to meet that end goal. Without him as the CEO, many of us highly doubt if Uber is going to grow as fast as it did, another Uber executive is quoted as saying.

If the ET report is to be believed, scepticism by Uber s India arm is not unwarranted at all. After selling its business to Didi in China, Uber had increased its focus on the Indian market. The company has consistently expanded its coverage across the country. According to a December 2016 report, Uber reported a whopping 442 percent surge in its revenues for the year that ended March 2016. Its revenues stood at Rs 374 crore against Rs 69 crore in the corresponding year. ALSO READ: Uber brings in-app tipping to drivers; introduces Driver Injury Protection Insurance

Besides massive investments, Uber has launched a slew of features and services, customized for the Indian users. During his visit to India, CEO Kalanick met several bigwigs of the country to give the feelers that the company was highly interested in the Indian market. Not that Uber s journey in India has been hurdle free, from Delhi rape case to drivers protests, the company had its own share of its troubles. Though the company constantly stressed that the Indian market was its priority. ALSO READ: Delhi rape victim sues Uber for accessing her medical records

Uber s India interests can also be associated with Kalanick s personal affiliation with the country. Before Uber, Kalanick worked in Kerala under Akamai, which had taken over his second startup Red Swoosh. But with him gone, will Uber be interested in India the same way it has been? At the moment, the company seems to be collecting pieces of broken glass after a series of destructive incidents.

While Uber works towards recovery on several fronts, this could be a huge opportunity for homegrown Ola to step up it game. The company is believed to be locked in a neck-to-neck competition with Uber. It recently garnered $350 million in latest funding from the likes of SoftBank. Kalanick s exit could help Ola take a more aggressive route to expand its business in the country. And in the meanwhile, Uber could be more protective in its approach towards its international markets.

When top management changes, two things happen. One, immediate funding may get slower. Second, international level changes in policies may not happen for some time. When a company is in stabilising mode, the competition tries to win the war. Given that there is uncertainty with the biggest competitor, rivals can benefit and there is a possibility that if they are raising funds, they might get an edge, Sreedhar Prasad, partner, e-commerce and startups for KPMG in India is quoted as saying by Hindustan Times. ALSO READ: Uber Mishaps: From data breach to CEO Travis Kalanick s leave of absence, here s everything that went wrong

The new chief executive may not be as aggressive or forward thinking as Kalanick. A company with a founder as CEO will have more aggressive growth than a professional CEO who is likely to take a cautious approach. In the long term, things will stabilize, but in the short and medium term, Uber may take a hit. Secondly, the investors may rethink further investments and will wait and watch. A professional CEO and chief operating officer will continuously be guided by the board, which will look for profitability, said Jaspal Singh, partner at Valoriser Consultants, is quoted as saying by Livemint.

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  • Published Date: June 22, 2017 12:14 PM IST



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