Uber seen girding for battle with Ola in India ahead of IPO
NEW DELHI: Uber’s decision to exit Southeast Asia, where it was bleeding money, should give the global ride-hailing giant more firepower to focus on India, where it’s locked in a fierce battle with local rival, Ola, industry analysts say.
With Uber considering a public offering in 2019, it would make sense for the company to pitch India’s growth potential to investors, said one industry source, adding it also needs to balance that by showing profitability.
Uber and Ola are both backed by a common investor, SoftBank , which pushed behind the scenes for the merger between Uber and Grab Holdings in Southeast Asia.
But it’s not clear that SoftBank intends to spur another Uber consolidation in India, an under-penetrated market with a population of 1.3 billion people.
Executives from Uber and Ola met at least twice over the last 12 months, sources aware of the meetings told Reuters, the most recent just weeks before Uber CEO Dara Khosrowshahi’s visit to India in February.
Among other things, Uber brought up a potential merger between the two companies with Uber in the driver’s seat, two of the sources said.
Ola’s spokesman said the company “is always actively looking for opportunities for expansion of its footprint,” adding that Ola has the backing of its investors, including SoftBank.
If any consolidation has to happen in the Indian ridesharing industry, Ola would lead that conversation, he said.
Uber declined to comment on the meeting, but said in a statement its deal with Grab will allow it to double down to invest aggressively in core markets, which includes India.
SoftBank declined to comment for this article.
For his part, Khosrowshahi, in a statement after the Grab deal, said he has no plans for another sale in which Uber consolidates its operations in exchange for a minority stake in a rival.
“There has been a clear conversation that this is the last deal where Uber will take a minority stake,” said a source familiar with Uber’s thinking. — Reuters