Uber to invest $1 bn in India; targets 1 million riders a day
App based taxi aggregator Uber has plans to invest $1 billion into a major initiative in India to target 1 million rides per day by March 2016. The news comes in a few days after it was reported that local rival Ola is in talks to raise $500 million.Updated: Jul 31, 2015 10:09 IST
App based taxi aggregator Uber has plans to invest $1 billion into a major initiative in India to target 1 million rides per day by March 2016. The news comes in a few days after it was reported that local rival Ola is in talks to raise $500 million.
This move would likely result in the expansion of the company's service beyond the 18 cities it currently covers in the country and bring in more investment in product, hiring and payment. Much of Uber’s investment is also expected to go toward expanding the subsidies it offers to lure new passengers and drivers to the platform.
"Uber is committing an additional $1 billion to India in the next nine months so we can expand and improve our operations, expand into newer cities, develop new products as well as payment solutions, and establish a great support network," said Amit Jain, president of Uber India in statement to Hindustan Times. "We are continuing to see robust 40% growth MoM and with more investment in product, hiring, and payment solutions, we expect to grow at an even faster rate. With this investment and the strong rate of growth we are seeing, we expect to hit over 1 million trips per day in the next six to nine months," Jain added
Industry estimates currently suggest that Ola and Uber, the top two cab rental companies, provide six lakh rides a day between them and are growing 20% to 25% month on month.
New investment would also advance the ride-sharing company’s interest in India to the same level as in China. Jain said, "We are extremely bullish on the Indian market and see tremendous potential here. India is one of Uber's big priorities, along with China and uberPOOL. India has also quickly become the largest market geographically for Uber outside the US."
Uber’s ambitious expansion plans come amidst controversy and possible new restrictions. App-based cab aggregators have been banned in Delhi since the alleged rape in December 2014 of a 26 year-old woman by an Uber driver. Since then, the government has modified regulations to say that app-based firms can be governed under radio taxi rules.
But Uber and Ola have argued against regulation contending that they are technology companies, not taxi operators, and come under the purview of India's existing IT laws.
Both companies have continued operating in Delhi while they await the grant of licences.
In effort to preempt further regulatory problems Uber is partnering with the government of Telangana to identify and train more than 2,000 drivers by the end of 2016 who will then drive on the Uber platform. The company which plans to invest up to $50 million in the southern state has set up its customer care facility in Hyderabad.
First Published: Jul 31, 2015 10:02 IST