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Dara Khosrowshahi in India: Uber’s plans for India, SoftBank, Ola merger & more

Uber CEO Dara Khosrowshahi, who took over after Travis Kalanick stepped down in June last year, is on his maiden trip to India. He is expected to meet government officials, regulators, who will have a major impact on how Uber operates its business in the country, and business partners, besides employees at Uber’s India office, reports NDTV.

In an interview with ET Now, Khosrowshahi spoke at length about the company’s plans for India and how India will be a key to Uber’s performance in the coming years.


On India

Khosrowshahi mentioned that India is currently one Uber’s ‘healthiest markets in terms of growth rates.” He added that he expects the Indian market to be one of the key to Uber’s position in the next 5-10 years. He informed that currently, the company has over 3 lakh active drivers in India, and complete more than 10 million trips per week.

According to this Livemint report, Khosrowshahi mentioned that Uber will be growing its engineering team three to four times its current strength, over 2018. In terms of specific services, the company will be focusing on the ride-sharing service UberPOOL, bike-taxi service UberMOTO, and food delivery service UberEATS, in India in 2018. Note that last month, Uber launched its autorickshaw service again in India, starting with Bangalore and Pune.

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He also stressed that P2P (peer-to-peer) car sharing will be a key next step in India, as this service has created the most value impact for Uber in other markets.

We have to be relevant locally

Generally, Uber aims to build technologies that are universal and can be applied to any country or region, however, in case of India, Uber needs to ensure that it is relevant locally, believes Khosrowshahi. He said that they need to understand the requirements of its drivers as well as customers in India, which are unique to them, and build technology products accordingly.

He cited the example of its bike-taxi service UberMOTO, which was first launched in March 2016 in Bangalore. He said that Uber will have to continue to find this balance between building a great global, and delivering local products at the same time. As of July 2017, UberMOTO has completed 2 million trips in India. The bike-taxi service is also operational in Bangkok, Thailand.

On SoftBank

In December 2017, SoftBank and its co-investors acquired an 18% stake in Uber, with SoftBank holding 15% and the other investors collectively holding 3%. The reason this was interesting was because SoftBank also holds a significant stake, estimated to be around 30%, in Uber’s domestic rival Ola. This had also fueled speculation that following SoftBank’s investment, Uber will now focus less on India.

However, Khosrowshahi said that SoftBank’s association with Ola hasn’t made things awkward yet. He added that according to him SoftBank is taking a bet that in the coming years ride-sharing will become an alternative to owning cars. He also mentioned that Ola is a stronger competitor, but Uber will not take a step back.

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Khosrowshahi also said that they will continue to be aggressive in India in terms of investments. He mentioned that the US and European markets are mature and the company has several profit pools, which allows it to continue investing in developing markets.

On merger with Ola

In regards to speculations about a possible merger with Ola, Khosrowshahi said it was too early, and reiterated that the current focus remains quality of operations. In a separate interaction with the media, as reported here, he said that Uber will be operational in the Indian market in five years’ time, whether that’s through a merger or not is impossible to tell now. He added that mergers and acquisitions are not a priority for him at the moment, as far as the Indian market is concerned.

On investment plans

Besides investing in India, Uber will also invest in autonomous vehicles, said Khosrowshahi. He said that the company wants to the leader in that space. Other new technologies the company is investing in includes vertical take-off and landing vehicles.

Issues Khosrowshahi did not address

Firstly, it needs to be mentioned that he can’t answer questions he isn’t asked. Having said that, these are important issues and connected to India.

Driver complaints

Last month, around 40,000 drivers associated with Uber and Ola went off the road in Chennai, protesting falling fares and demanding government regulation of these services. In December 2017, there was a similar protest in Mumbai, which happened in the backdrop of the Maharashtra government saying it will fix both minimum and maximum fares for app-based taxi companies during the winter session of the state’s legislative assembly.

Over past year or so, there have been several protests across the country, after both Ola and Uber tweaked their incentive plans which led to reduced incomes. MediaNama had reported that drivers were are not able to make their ends meet or pay EMIs for their car loans.

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Tussle with regulatory authorities

In November last year, the Maharashtra government told the Bombay high court that it will be deciding to fix both minimum and maximum fares for app-based taxi companies such as Ola and Uber. While last month, the Karnataka government notified minimum and maximum fares for taxis operated by aggregators such as Ola, Uber, and others. Uber (as well as Ola) has had several other run-ins with state-level authorities regarding the legitimacy of its service, licensing, fares, etc. Apparently, Khosrowshahi will meeting with regulators during his two-day trip to India, but will that be enough to resolve all issues?

Medical records mishandling case

In June last year, Uber’s president of business in the Asia Pacific, Eric Alexander was fired for obtaining and holding, for about a year, the medical records of a Delhi woman who was raped by an Uber driver. Alexander had shared the medical records with Uber CEO Travis Kalanick, Senior Vice President Emil Michael, and they collectively either spoke about the records or showed them to several other executives at the company. She filed a lawsuit against the company and these three senior management members. Uber settled this lawsuit in December 2017. Prior to the settlement, in October 2017, Emil Michael had filed a motion to get the lawsuit dismissed.

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