BEN­GALURU

The Pak Banker - - COMPANIES/BOSS -

Taxi hail­ing ser­vice Uber Tech­nolo­gies Inc. will in­vest as much as $1 bil­lion in In­dia within the next six to nine months, sig­nalling its am­bi­tion to catch up with lo­cal ri­val Ola and be­come the dom­i­nant taxi ser­vice app in the coun­try.

Since launch­ing in In­dia in Au­gust 2013, Uber has slashed prices, in­tro­duced low-cost ser­vices and even ac­cepted cash pay­ments to adapt its lean busi­ness model to In­dia and In­di­ans. Uber is the big­gest threat to lo­cal ri­val Ola, run by ANI Tech­nolo­gies Pvt. Ltd.

Uber, an app-only ser­vice, said on Thurs­day that it is grow­ing at a rate of 40% month-on-month in In­dia. With the in­creased in­vest­ment in prod­uct, hir­ing and pay­ment so­lu­tions, the com­pany ex­pects to do more than one mil­lion daily rides in the next six-nine months, ac­cord­ing to Amit Jain, who was ap­pointed pres­i­dent of Uber In­dia in June. The com­pany de­clined to say how many rides it is do­ing cur­rently.

"We are ex­tremely bullish on the In­dian mar­ket and see tremen­dous po­ten­tial here. We have grown ex­po­nen­tially in In­dia, a global pri­or­ity mar­ket for us, that has also quickly be­come the largest mar­ket ge­o­graph­i­cally for Uber out­side the US. We're com­mit­ting an ad­di­tional $1 bil­lion to In­dia in the next six-nine months so we can ex­pand and im­prove our oper­a­tions, grow into newer cities, de­velop new prod­ucts as well as pay­ment so­lu­tions, and es­tab­lish a great sup­port net­work," Jain said in an emailed state­ment.

Uber's $1 bil­lion cash in­fu­sion in­di­cates the com­pany will com­pete more ag­gres­sively with Ola, which boosted its lead­er­ship po­si­tion by buy­ing smaller ri­val Tax­iForSure in a $200 mil­lion deal in March. Though Ola is cur­rently the clear mar­ket leader, Uber's tech­nol­ogy ex­per­tise and mas­sive war chest may help the com­pany cut the lead of its lo­cal ri­val and trig­ger another price war among taxi ser­vices.

Ola is close to rais­ing $500 mil­lion at a val­u­a­tion of $5 bil­lion from ex­ist­ing in­vestors that in­clude Soft­Bank Group, Tiger Global Man­age­ment Llc and Se­quoia Cap­i­tal, The Eco­nomic Times re­ported on 28 July. Mint re­ported the talks first on 21 May. Uber soft-launched in In­dia in Au­gust 2013 and started a full-fledged ser­vice two months later with much fanfare, of­fer­ing ex­pen­sive rides in the Mercedes-Benz S-Class and other lux­ury cars, charged to cus­tomers through di­rect, au­to­matic de­duc­tions on their credit cards stored in the app.

Taxi ser­vices led by Ola and Uber are ex­pe­ri­enc­ing a boom in de­mand in a coun­try where trans­port in­fra­struc­ture is still creaky, and safe public and pri­vate com­mut­ing op­tions are few. A shift in con­sumer habits to­wards con­ve­nience and on­de­mand ser­vices and, most cru­cially, low prices, has fu­elled the surg­ing de­mand. Yet, cab ser­vices have also run into trou­ble with sev­eral reg­u­la­tors, in­clud­ing the Re­serve Bank of In­dia (RBI) and state reg­u­la­tors.

The Delhi gov­ern­ment banned all mo­bile app-based cab-hail­ing ser­vices in the Na­tional Cap­i­tal last De­cem­ber af­ter a woman was al­legedly raped by a driver con­tracted to Uber.

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