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Will Uber Be Merging With Ola In India?

Taxi wars - Uber's strategy for India market

Dara Khosrowshahi, who took reins as Uber’s CEO last August has once again expressed his desire to invest in the Indian market. His statement, “I think it would be a mistake to show profits in India next year. It would mean we aren’t investing enough…. We are confident about our competitive position in India…” clearly lists out what plans he has for India.

However, with Uber’s recent exit in South East Asia, which is a 3rd in a row after Uber’s exit in China & Russia, the market participants are curious to know what would be its strategy for it’s largest market left in Asia.

We at CoffeeChatAsia analyzed a few factors why Uber’s CEO might be right in his sentiment about growing in India:

– The sheer quantum of the population moving to urban areas & lack of proper public transportation infrastructure
– Despite Ola’s strong presence in several cities, Uber manages to hold over 39% share during the recent period of Jul-Dec 17

– The Driver-rider sentiment and quality to play a major role in Indian markets
– Uber considers India as the third largest market, after US and Latin America
– Uber CEO believes, there is enough untapped market for growth @ 10x, despite Ola and other services
– More drivers willing to join the network, promising a decent pay
– Indian Youth switching to urban mode, preferring cabs over conventional transport like Auto-rickshaws and Govt. buses

At the same time, it can be seen that Uber has been struggling with Softbank’s (largest shareholder in Uber) investment in Ola and the push for the focus on profitable markets as well as consolidation.

While Ola competes with Uber on quick market expansion offering services in several cities, it’s technology is still lagging behind Uber’s. Having said this, Ola has a much better customer service network, unlike Uber which completely relies on online channels and do not have any call center facilities which is crucial for consumers.

In any case, it would be interesting to watch this space to see where this consolidation leads to and if the consumer is a winner or a loser in the game.

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