Ola and Uber India are having talks about merging Uber’s business in India with the rival company Ola. The reason coming out for this is Uber wants to make up for the losses it is experiencing in Asian countries, especially India. Many discussions have already been done between the 2 popular names in Indian cab market and a deal can be finalised soon.
Involvement of Softbank
Softbank, which has invested money in both these companies is encouraging this partnership. Both Ola and Uber are spending huge money to stay ahead which is the reason why they are dealing with losses. OLA has got a funding of $2 billion from investors including SoftBank Group Corp. and Tencent Holdings in past one year and this seems to be working as a positive for them. The cab market in India is at $10 billion to be a leader in this segment large investments are needed.
Rise of Ola
If we believe Ola, it has a market share of around 60-70% India with more than 1 million drivers who help the comp[any to operate in as many as 110 cities and completing 2.3 million rides every month.
Uber has been competing Ola with prices since 2013 and it seems that this battle will stop after merging only. The after merging scenario will be very interesting and a question arises that who will control the combined company.
Future of cab market in India
This acquisition will make the position of Ola very strong in the Indian market and newcomers will be facing tough competition as Ola can happily spend more money to create a monopoly.
Uber has been following this policy from past 2 years as its business in China and Russia was acquired by local companies named Didi Chuxing and Yandex, respectively.