Ola And Uber in India to Merge? Talks of Merger Between Ride Hailing Rivals Gain Momentum
If the merger happens, Ola will acquire Uber’s operations in India. According to the report, SoftBank has called for a merger between Ola and Uber’s India unit as part of its planned consolidation in the cab hailing market.
New Delhi, March 28: Amid the drivers’ strike on the frontend, the potential merger of ride-hailing rivals Ola and Uber is gaining momentum. A deal between the two is being brokered by Japanese investment giant Softbank. According to a report by Business Standard, Softbank is a common investor in both the companies. The Japanese investor has been instrumental in Uber selling off its Southeast Asia unit to rival Grab. It must be noted that the talks of merger have been going on since a year now but have gained momentum in the last few weeks.
If the merger happens, Ola will acquire Uber’s operations in India. According to the report, SoftBank has called for a merger between Ola and Uber’s India unit as part of its planned consolidation in the cab-hailing market. Ola will acquire the Indian unit of Uber, but details of the deal are still being discussed and may be out soon.
When Chief Executive Officer of Uber, Dara Khosrowshahi was asked about the deal, he said, “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”. The CEO further informed that India is already among the top three markets (besides the US and Latin America), accounting for 10 percent of its trips globally.
It must be noted that India is one of Uber's healthiest markets in terms of growth rates of number of active drivers and weekly trips. To recall, Uber in 2015 had 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.
The recent development has come in the light of Uber’s recent exit from Southeast Asian market by selling its arm to Grab and take 27.5 % of the enlarged group. The Business Standard report states that pst the completion of that deal, Uber will control 27.5% stake in the combined entity. “Talks have been on between the senior executives of both the firms (Uber and Ola),” said one of the persons with direct knowledge of the talks, declining to state who the officials are given that the information is not public yet. “The deal may be closed in a couple of months,” the person said.
(The above story first appeared on LatestLY on Mar 28, 2018 09:04 PM IST. For more news and updates on politics, world, sports, entertainment and lifestyle, log on to our website latestly.com).