Mumbai: Uber Technologies Inc. explored options for its Indian ride-hailing business, including a sale, but suspended discussions after tech startup valuations cratered, people familiar with the matter said.
The US company began weighing alternatives and reached out to several interested parties after recognizing it had limited potential for profitable expansion in the country, the people said, asking not to be named as the information is not public. It pondered a stock swap with local companies or even a pullout, before a global equity market rout upended plans, the people added. A stock deal was favored in exploratory talks as that would allow Uber to retain a foothold in India, the people said.
Uber and its local-rival Ola had been struggling to eke out a profit in a rapidly growing but price-sensitive market, where constant driver attrition was pressuring margins. A sale to a local operator could have mirrored similar deals it struck with Didi Global Inc. in China and Grab Holdings Ltd. in Southeast Asia, where Uber ceded the markets but kept an equity stake in the dominant local player to tap future growth. The maneuvers ended costly turf wars waged with driver incentives and cash subsidies.
Uber disputed the idea it had considered retreating from India.
“Bloomberg’s reporting is categorically false. We have never explored exiting India — not even for a minute,” company spokesperson Ruchica Tomar said in an emailed statement. Uber remains committed to India and continues to hire people “aggressively.”
Uber, whose shares have gyrated wildly since its 2019 IPO, has hived off money-losing businesses to achieve its goal of being consistently profitable. In May, it delivered a positive outlook for earnings, signaling the company plans to capitalize on robust ride demand without compromising profits by focusing on product changes, rather than incentives, to address a driver shortage.
India and Japan are the sole major remaining Asian markets for Uber, which has scaled back sharply since the tumultuous days of former chief Travis Kalanick. The San Franciso-based company started services in India in 2013 and now offers ride-hailing in almost 100 cities across the country, its website showed.
Conversations around an India deal had been preliminary and the company could decide not to revisit those options, the people said.
Uber also sold its food-delivery business in India to local rival Zomato Ltd. in 2020 in return for a stake in the local startup. The US giant now competes mainly with Ola, which had selected bankers to prepare for an initial public offering in Mumbai, Bloomberg News reported last year. Uber announced in May that it would add 500 tech workers this year to its Bangalore and Hyderabad engineering centers. –Bloomberg