While both Ola and Uber are currently busy handling driver strikes across the nation, Ola might be venturing to buy Uber India. The talks are still in progress and Japanese based Softbank is expected to be the broker for the merger. Softbank currently holds a controlling share in both the companies and had invested around $2 billion in Ola while Uber got around $1 billion from the bank.
This comes just days after Uber sold it’s Southeast Asian business to its local rival Grab two years after it sold its Chinese operations to Didi Chuxing. However, according to the sources, Uber will agree to the merger only if it gets a controlling stake in the merged entity. Meanwhile, both the companies have denied any talks about the merger when approached by Indian Express.
We continue to make aggressive strides in India and we consider India as one of our forts. How we perform as a company after 10 years very much depends on our success in India.
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.
– Dara Khosrowshahi, Uber CEO
Khosrowshahi also said that India among the top 3 countries worldwide accounting for 10% of the total rides. Uber is planning to have an IPO early next year which gives them roughly 10 months to cut down losses, which the SoftBank has been continuously focussing on.
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 realizing this ambition. Ola is always actively looking for opportunities for expansion of its footprint.
– Ola spokesperson
This deal will serve as a blessing in disguise to both companies as they have been using predatory pricing model for a while now and this merger might slow them down and actually focus on profit instead of burning cash and providing services at a loss.
While there’s a little time until we know for sure if this merger will go through or not but it should definitely get some interesting results for the customers and the drivers. Another worrisome aspect is the fact that Ola might play the monopoly card after acquiring Uber which won’t be good for anyone.