New Delhi: Talks between ride-hailing rivals Ola and Uber for a potential merger of their Indian units is gathering steam. According to sources, a deal between the two is being brokered by Japanese investment giant Softbank, Business Standard reported.
Softbank is a common investor in both the companies and was also instrumental in Uber selling off its Southeast Asia unit to rival Grab.
The report stated that merger talks, which have been ongoing close to a year now, have gathered intensity in the last few weeks. It states that Ola will acquire the Indian unit of Uber, but the finer details of the deal are still being discussed.
When asked about the possible deal, chief executive Dara Khosrowshahi remained cryptic. “We will look at any deals that can add value to its partners and shareholders, but we believe in controlling our own destiny in India,” he said.
If the deal goes through, it would be Uber’s fourth large retreat. Apart from the sale to Grab, the US firm also sold its China unit to rival Didi and its Russian unit to local player Yandex.
Khosrowshahi said India is already among the top three markets (besides the US and Latin America), accounting for 10 percent of its trips globally.
“The great news about our Grab deal is that it allows us to double down to invest aggressively in our core markets – and we consider India very much as core to Uber’s success… we will be more focused on organic growth in the markets that we are operating in,” he said.
The top executive, who took over the reins of Uber in August last year, said the company will invest “whatever we have to in order to succeed in India”.
“We have no cap. We will increasingly build out our product to be leading not only globally, but also focus on specific functionality purpose-built for our Indian customers,” he emphasised.
Uber has been pumping in substantial funds to fuel its growth in India. In 2015, Uber announced an investment of USD 1 billion in the country to expand its services. It has also set up a response and support centre in Hyderabad with an investment of USD 50 million.
Profitability in the Indian market, however, is still some time away for Uber, one of the world’s most valued startups.
“I think it would be a mistake to show profits in India next year. It would mean that we aren’t investing enough… We are confident about our competitive position in India our driver sentiment, rider sentiment, the quality of our service are all leading and we intend to build on that lead,” he said.
He added that India is one of Uber’s healthiest markets in terms of growth rates of number of active drivers and weekly trips