The Hush Post: Talks are on for the merger of rival cab companies Uber and Ola in India. A Japanese firm SoftBank, that holds controlling stakes in both the companies, is learnt to be brokering the merger deal between the rival companies. The Japanese conglomerate firm is doing so as it is learnt to be globally consolidating its investments in the cab business.
The Japanese firm, SoftBank Vision Fund that has approximately 26 per cent stake in Ola and slightly lesser stake in Uber, in recent past invested $2 billion in Ola and in Uber it pumped in about $1 billion, a report in Business Line stated on Thursday.
Before that this week, Uber had agreed to sell its South-East Asian operations to Grab two years after it sold its Chinese operations to Didi Chuxing, where also the investor was Softbank, the report said.
Insiders in both companies revealed the move behind the consolidation is spurred by increasing competition among Softbank-backed cab aggregators, which is draining its resources, it was reported.
In India, Ola has made major gains as far as market share is concerned and it recently bought food aggregator Foodpanda to take on UberEats, which is gaining traction in the country. Elsewhere, too, Uber has been pouring in money to take on rivals, which is worrying Masayoshi Son’s Softbank Group Corp. Uber, Grab, Ola and China’s Didi Chuxing provide about 45 million rides a day. In India, Ola has 900,000 cabs under its operations, while Uber has about 350,000, the BL report said.
Ola has not denied the merger talk reports while Uber says it will focus on organic growth. “In India’s transformative digital journey, Ola will always be an active and integral part for decades to come. Softbank and all other investors are committed in realising this ambition,” a spokesperson of Ola reportedly said.
Meanwhile, Dara Khosrowshahi, CEO, Uber, said in a statement: “We’d, of course, look at any deals that can add value to our partners and shareholders, but we believe in controlling our own destiny in India.”