Uber Technologies will continue to invest in India even though the company’s local operations continue to lose money. The company, which has 300,000 active drivers doing over 10 million weekly trips, still considers the country a developing market that requires investment.
“The greatest value that we can create here (in India) is through continuing our investment. It is still a developing market which requires investment. For example, on our UberPool product we lose a lot of money. But this is the early stage of the product therefore we will keep investing to develop the product,” said Dara Khosrowshahi, CEO of Uber Technologies, adding that the company’s operations in India are not profitable.
Khosrowshahi, who was the CEO of Expedia Inc for 10 years before joining Uber last year, also said that given the demands of Indian customers, the country can be a laboratory for products that would work for ‘the next 6 billion customers who get to access our products’.
The company’s biggest competitor in India is the Bhavish Aggarwal founded Ola. And, Japanese multinational SoftBank Group is a major investor in both the companies. In January 2018, SoftBank became the largest investor in Uber with a stake of 15%. SoftBank also owns stakes in the Southeast Asian ride hailing app Grab and China’s Didi. There has been speculation that Softbank wants Uber out of certain markets. However, Khosrowshahi said that Uber will remain in India.
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“I don’t expect anything to change with respect to our competitive dynamic with Ola. We have a lot of respect for Ola, they are a very strong local competitor. But I think that competition makes us better and makes Ola better...We are quite confident of our competitive position here. We are the leading player in India and we intend to keep it that way through continued investment in our people and in terms of building our services,” said Khosrowshahi.
He added, “SoftBank is a respected investor but the strategy of the company will be decided by us and the board. While SoftBank may have an opinion, their’s is not the only opinion on the room. It is my belief that we as a company need to have a balanced profile in terms of growth and investment.”
Besides the ride-hailing business, Uber recently entered the food delivery space with UberEats. Here again, Ola is a competitor after its acquisition of Foodpanda. According to Khosrowshahi, UberEats is the fastest growing business segment within the company and India is the fastest growing market for UberEats. The company offers the UberEats service in 9 Indian cities.
But he is not impatient to rapidly expand in more Indian cities. Khosrowshahi said that he is satisfied with the level of Uber’s exposure in the Indian market as of now and future expansion will come after perfecting the existing product.
Uber, which clocked revenues of $6.5 billion in 2016, will also continue to invest in Southeast Asia despite talk of exiting the market and taking a stake in Grab.
“The plan for Southeast Asia is to invest aggressively there. It is an investment market so we will lose money there. But we need to try hard to become more competitive there,” Khosrowshahi said.
