Online cab aggregator Uber Technologies explored of selling its Indian ride-hailing business, but called off talks after tech start-up valuations cratered, citing sources Bloomberg reported on Thursday.
The US ride-hailing firm began weighing alternatives and reached out to several interested parties after recognising it had limited potential for profitable expansion in India, the sources said.
The company also pondered a stock swap with local firms or even an exit, before a global equity market rout upended plans, the sources added. According to the report, a stock deal was favoured in exploratory talks as that would allow Uber to retain a foothold in India.
Uber and its local-rival Ola had been struggling to derive 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 manoeuvres ended costly turf wars waged with driver incentives and cash subsidies.
Uber, however, denied the idea that 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, signalling the company plans to capitalise 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 firm started services in India in 2013 and now offers ride-hailing in almost 100 cities across the country, according to its website.
Uber also sold its food-delivery business in India to local rival Zomato in 2020 in return for a stake in the local start-up. The US giant now competes mainly with Ola, which had selected bankers to prepare for an initial public offering (IPO) in Mumbai.
Uber announced in May that it would add 500 tech workers this year to its Bangalure and Hyderabad engineering facilities.