The country’s two major cab aggregator services — Ola and Uber — are reportedly in talks for a merger and the deal is apparently being brokered by Japanese investment giant SoftBank. It is learnt that the talks have been on for some time and is spearheaded by SoftBank, and not the cab aggregators, that has substantial investments in both the companies.
When contacted by the IndianExpress.com, both, Uber India and Ola, denied that any merger talks were underway.
However, sources in the know of the developments suggested that any such merger will only happen if Uber holds a majority stake in the merged entity.
These merger talks come two days after Uber Inc agreed to sell its Southeast Asian operations to rival Grab for a 27.5 per cent stake in that company. Uber had operations in Cambodia, Indonesia, Malaysia, Myanmar, the Philippines, Singapore, Thailand and Vietnam. Uber CEO Dara Khosrowshahi will have a seat in the boardroom. In October last year, Uber ended operations in China, selling its service to Didi Chuxing. When asked what implications the Grab deal will have on its India operations, Khosrowshahi said the company will invest “whatever we have to in order to succeed in India”.
“The great news about our Grab deal is that it allows us to double down to invest aggressively in our core markets – and we consider India very much as core to Uber’s success… we will be more focused on organic growth in the markets that we are operating in,” Khosrowshahi told PTI. He said that India is among its top three markets after US and Latin America and it accounts for 10 per cent of its global trips. In 2017, Uber provided four billion rides worldwide. In October last year, Ola secured $2 billion in new funding from a group of investors including SoftBank and Tencent Holdings Ltd, giving it the upperhand in the $10 billion industry, 90 per cent of which is controlled by Ola and Uber.
On its part, Uber sold a 15 per cent stake worth a total of $9 billion to Softbank, making the Japanese conglomorate its largest investor. The deal also includes a direct investment of $1.25 billion into Uber.