Industry News

Uber planning to invest in India Market

India: The radio taxi giant, Uber closed a fund raising of approximately USD3.5 billion, while planning to invest largely in the country. Uber considers India to be the third largest market, right after the United States and Chinese market. The company witnessed a growth of over 26 times across India, during 2015, when compared to 2014.

The Indian president of Uber, Amit Jain, acknowledged that the company is on investment mode in Indian market. According to him, every country is different and companies have to customise as per the market, even as the technology back bone remains the same, globally. The company had to customise its app to work on low network conditions in India. Also, the company introduced cash payment option in India, which was never opted in any other market before. He also discussed about the country’s bullish market and its exponential growth over the last two years.

In July 2015, the company announced about an investment of almost USD1 billion in Indian market to expand its services. While, planning the investment, the company had established a support centre in Hyderabad, India with an investment of nearly USD50 million.

Prior this week, the company raised funds from Saudi Arabia's sovereign wealth fund of worth USD3.5 billion, out of which a substantial portion of the new funding would be deployed in India, as per Amit Jain. Including the new investment, the company would have over USD11 billion in its global war chest to invest in their product and markets on an international level.

In the Indian market, the raised funds will assist the US based company to compete with the local rival, Ola, which on the other hand, is being backed by renowned investors such as Japan based, SoftBank and China based, Didi Kuaidi.

While declining about the profit generation from the Indian market, Amit Jain commented "We are a for-profit company and there is a definite path to profitability. I will not be able to talk about the time it will take to get there".

Without disclosing the exact names of the Indian cities, Amit Jain claimed that, the company made almost USD1 billion profits from its top thirty Indian cities, last year. Moreover, Uber is now available in more than 400 cities around 70 countries across the globe, out of which, it is available in 27 cities of India, which is more than any other country except for the United States and China.

Discussing about the regulatory challenges in the Indian market, Amit Jain shared “The regulatory challenges are both a concern and opportunity. Also, the cab aggregation is a new area of business. As technology moves at a fast pace, regulations have to keep pace and evolve. We are engaged with government across levels to ensure compliance and are committed to ensuring growth for driver partners and smooth experience for customers.”

According to a recent report published by TechSci Research, “India Radio Taxi Services Market Forecast and Opportunities, 2020” radio taxi services market in India has been exhibiting strong growth over the last few years, with tier-I and tier-II cities witnessing vast improvements in their transportation systems. With changing travellers lifestyle and preferences, an increasing number of people in the country, especially in corporates.

As per TechSci Research, Uber ranks among the top players in the Indian radio taxi services market, during 2015. Moreover, the worthy growth of Indian market in the radio taxi services, depicts a huge potential of the country, which is attracting this eminent radio taxi company to invest more in the market. On account of the various benefits offered by Uber to its customers, a wide customer base is expected to increasingly shift from traditional unorganized taxis to organized radio taxis in India, which would assist the company to capture a significant share in the Indian radio taxi service business in coming years.

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