Ola and Uber in merger talks; Bhavish Aggarwal meets Uber executives in San Francisco – Times of India
Ola and Uber are in talks for a possible merger, according to two sources in the know, who revealed that Ola’s co-founder and CEO Bhavish Aggarwal met top Uber executives in San Francisco, US recently.
Both companies had held conversations four years ago as well, when common investor Softbank had pushed for a merger. A deal did not materialise back then.
Those conversations seem to have revived in recent months as both Uber and Ola are facing growth pangs. The cab hailing companies fiercely competed against each other to dominate the Indian market and spent billions of dollars on driver incentives and discounts to passengers.
However, intensity of the competition died down in the recent years as the pandemic dampened demand for app-based cab hailing in India with both companies cutting flab and tightening operations.
Ola has shut its quick delivery and used car businesses already with the company deciding to focus on its core mobility with a leaner team.
The latest round of layoffs at Ola, which was initially estimated to be around 500, might see as many as 1000 people losing jobs, ET reported on Friday.
Meanwhile, a month ago, Uber had strongly denied any move for a sale while reacting to a Bloomberg report that suggested the company had explored a sale of its India unit a year ago.
Uber did not respond to questions on talks between the two companies or Aggarwal’s visit. Ola did not address the queries from ET Prime that sought to verify the talks or Aggarwal’s meeting with Uber executives.
However, an Ola statement suggested that rather than merger the company would look at acquisitions to consolidate its position.
“Ola is one of the most profitable ride hailing companies in the world with a strong balance sheet. We are the market leader in India and are much bigger than other player. Hence, merger of any kind is completely out of the equation. We believe that India has a lot more opportunity to unlock when it comes to mobility services. As a strong vertically integrated mobility company we will further consolidate our position by any acquisition in the Indian market, if at all.”
Both companies had held conversations four years ago as well, when common investor Softbank had pushed for a merger. A deal did not materialise back then.
Those conversations seem to have revived in recent months as both Uber and Ola are facing growth pangs. The cab hailing companies fiercely competed against each other to dominate the Indian market and spent billions of dollars on driver incentives and discounts to passengers.
However, intensity of the competition died down in the recent years as the pandemic dampened demand for app-based cab hailing in India with both companies cutting flab and tightening operations.
Ola has shut its quick delivery and used car businesses already with the company deciding to focus on its core mobility with a leaner team.
The latest round of layoffs at Ola, which was initially estimated to be around 500, might see as many as 1000 people losing jobs, ET reported on Friday.
Meanwhile, a month ago, Uber had strongly denied any move for a sale while reacting to a Bloomberg report that suggested the company had explored a sale of its India unit a year ago.
Uber did not respond to questions on talks between the two companies or Aggarwal’s visit. Ola did not address the queries from ET Prime that sought to verify the talks or Aggarwal’s meeting with Uber executives.
However, an Ola statement suggested that rather than merger the company would look at acquisitions to consolidate its position.
“Ola is one of the most profitable ride hailing companies in the world with a strong balance sheet. We are the market leader in India and are much bigger than other player. Hence, merger of any kind is completely out of the equation. We believe that India has a lot more opportunity to unlock when it comes to mobility services. As a strong vertically integrated mobility company we will further consolidate our position by any acquisition in the Indian market, if at all.”
For all the latest business News Click Here
Denial of responsibility! TechAI is an automatic aggregator around the global media. All the content are available free on Internet. We have just arranged it in one platform for educational purpose only. In each content, the hyperlink to the primary source is specified. All trademarks belong to their rightful owners, all materials to their authors. If you are the owner of the content and do not want us to publish your materials on our website, please contact us by email – [email protected]. The content will be deleted within 24 hours.
