Uber has recently sold its food delivery business, Uber Eats, in India to a local rival Zomato. Through this deal, Uber would own 9.99% of Zomato and its users would automatically become part of the Indian company. This move by Uber is to shed loss making operations and become profitable by next year.
According to Satish Meena, an analyst at Forrester, told TechCrunch, Zomato still lags local rival Swiggy, which accounts for majority of the food orders in the country.
Dara Khosrowshahi, chief executive of Uber, however is happy over the performance of Uber Eats in India as over the last two years, as the food delivery business has achieved an incredible amount.
People familiar with the matter said Uber Eats, which entered market in India in 2017, initiated conversations to sell the local business in late 2018.
Uber will continue to invest in growing our local Rides business. We have been very impressed by Zomato’s ability to grow rapidly in a capital-efficient manner and we wish them continued success,” he added.
As per the industry estimates, Ola leads the business with presence in over 110 cities. American ride-hailing giant, Uber is certainly not a “clear category leader” in India.
The Uber Eats employees in India have now been given an option to join Uber while rest will be let go, people familiar with the matter told TechCrunch.
Offloading Uber Eats India would help Uber, which reported a quarterly loss of more than $1 billion in November.