American cab-hailing app company Uber may soon invest another $1 billion (around ₹6,688 crore) in India to outpace Bangalore-based rival Ola, as the company looks to expand operations in new cities, increase fleet size, subsidise rides and incentivise drivers. This is in addition to the $1 billion that Uber founder Travis Kalanick had promised to invest during his India visit in January.
Sources in the government told HT that Uber’s executives have already held talks with officials regarding the fresh investment. An Uber official also confirmed the company’s plans.
Uber recently announced a deal to sell its China business to local rival Didi Chuxing for an ownership stake of 18% in the combined China entity, valued at $35 billion, with Didi also buying a $1 billion stake in Uber.
After it exited China, India has become Uber’s second-largest market by the number of trips it clocks.
India is an under-penetrated market when it comes to cars – 30 vehicles for every 1,000 people.
“It is difficult for me to comment,” Uber’s India head Amit Jain said when asked about the company’s new plans.
He, however, said Uber’s focus on India is absolute. “We will continue to do whatever it takes to grow the business, invest in the market, and move towards the business that we talked about.”
During his visit to India in January, Kalanick had said Uber will double the investment in the country if the growth is fast and there is substantial return-on-investment. Uber recently added over a 1,00,000 vehicles, taking its total fleet size in India to 4,00,000 cabs. It has also added bike taxis and autos. According to reports, it has also hired three top executives to its Indian management team to strengthen its business development, engineering and communication arms.
However, the company is facing some regulatory overhangs. The Delhi government has proposed that all cabs, including Uber and Ola, should have meters installed. Uber tracks distance using GPS.
“We are using a more accurate way of measuring distance… It is money saving for our driver partners,” said Jain.
Uber currently has a balance sheet of $11 billion, and is also the world’s most valuable startup, with a valuation of $68 billion. With China, which required around a $1-billion investment every year, now out of the picture, a lot for Uber’s money is likely to head towards India.
“We can continue to invest in developing markets, including India, South East Asia and Latin America for quite some time,” Jain said.
Ola and Uber have been competing neck-to-neck for the last three years. While Ola (ANI Technologies Pvt Ltd) is still the leader in India, Uber is catching up. India’s cab business, according to SoftBank Group, is likely to be worth $7 billion by 2020.