Una Galani -
Uber’s Indian takeout smacks of desperation. The US ride-hailing giant may swap its food delivery business in the country for 10 per cent of $3.3 billion local rival Swiggy, according to a February 22 report in the Economic Times.
Checking out of Uber Eats’s fastest-growing market may cut losses ahead of a global initial public offering. It also serves up an advantage to potential rivals.
After the firm drove out of China and Southeast Asia, in return for minority stakes in rivals Didi Chuxing and Grab, boss Dara Khosrowshahi and his team were explicit about their commitment to India.
Chief Operating Officer Barney Harford said in April that Uber would “double down, triple down” on core markets including the subcontinent. So even a partial retreat from a country powering Uber’s global growth would be a big surprise.
Uber Eats has become an important part of the wider company as it prepares for a blockbuster offering which could be worth $120 billion. But there’s also twice as much competition in food than in rides.
In India, for example, it is racing against Ola Eats, part of India’s top taxi-app, as well as standalone food delivery companies Swiggy and Zomato, respectively backed by heavyweight investors Naspers and Ant Financial.
India probably accounts for a large chunk of Uber’s massive $1.8 billion of global losses before taxes, depreciation and other expenses last year, based on Ola’s financial filings.
Part of that will be Uber Eats, offering chunky discounts and luring diners with adverts featuring Bollywood celebrity Alia Bhatt. Yet it lags competition with a presence in about half as many Indian cities as Swiggy.
The business should be relatively easy to hive off. Brooks Entwistle, chief business officer for the international business, told the audience at a Breaking views event in Singapore in January that 68 per cent of people who order on Uber Eats have never booked a ride through the app, compared to a 40 per cent average elsewhere.
Yet as ride-hailing firms across Asia, from Didi and Grab to Indonesia’s Go-Jek, morph into super- apps dabbling in everything from logistics and ride-hailing to groceries, Uber’s move threatens to feed its future rivals. — Reuters
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