Cab aggregator Uber rules out buys in India

Online cab aggregator Uber has ruled out any plans to acquire competitors in India, but said it is set to roll out its second phase of expansion.

The San Francisco-based company will also soon launch ‘Uber for Business’ (U4B) services in India, which will allow employees to bill their Uber trips directly to their respective companies.

This is expected to be a big disrupter in the fleet operator industry, which mostly depends on companies for business.

“We have had several Indian corporates approach us to start this service,” Bhavik Rathod, General Manager for Uber in Bangalore, told BusinessLine . The U4B service, through its centralised dashboard, helps company administrators manage business trips by their employees. There is also a possibility of companies reducing the number of cars given out as perks for their employees and replacing them with the U4B service.

According to an Uber survey, employers can save as much as $1,000 per employee through this service.

No acquisition Rathod added the company wants to launch more products in India, but acquisitions are not on the cards. “We haven’t considered (acquisitions) anywhere in the world. I think we will try to go deeper and wider in the country. We plan to launch more and more products here.” He said the company has always grown organically and now has a valuation of $40 billion.

Last month, Ola Cabs bought the Bangalore-based TaxiForSure for $200 million in a cash and stock deal, the second biggest ever such deal in the start-up space in India. The acquisition propelled Ola to become the biggest cab aggregator in the country, surpassing Uber.

Phase two expansion The company is set to enter its phase two of expansion by rolling out services including India-specific Uber Go and Uber X, in tier two and three cities across India, said Rathod, who had earlier worked with consultancy EY (formerly Ernst & Young).

Unlike some of the business models adopted by competitors, Uber works closely with individual drivers and connects them with vehicle financing agencies such as Sriram Finance to buy cars at extremely low interest rates, he said.

He did not share details of the amount Uber has invested in the country but pointed out that the company has made “deep investments” in India where the industry is still in a nascent stage and is extremely fragmented. The entire industry is worth about ₹20,000 crore and the share of online cab aggregators is a mere 5 per cent.

Rathod said the focus is more on getting a cab for a passenger within eight minutes and going forward even less than that. However, there are no plans to do away with surge pricing which competitor Ola has been asked to drop it after the intervention of the local transport department.

He pointed out that several safety features have been introduced specifically for India and a new post specifically for the country, India Safety Lead, has been created. The lead’s role is to advice the company on adding more safety features for its passengers.

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