Uber Technologies will not dial down on its food delivery service-Uber Eats in India
Earlier this month, ET reported that Uber’s food delivery service has seen a significant churn in leadership, with two top executives — India chief Bhavik Rathod and head of central operations, Deepak Reddy — resigning.
“It's very early days for food, and I don’t think anyone has figured it out globally. Solving for a three-sided marketplace is a complex problem, and it will take a few cycles for the market to mature," said Manik Gupta, chief product officer of Uber.
India is one of the fastest growing markets for food delivery in the Asia Pacific region, he added.
Gupta’s comments come less than a month after ET reported that the New York Stock Exchange-listed mobility giant had restructured its corporate holdings and brought its India business, including food delivery, under Uber India Systems.
They also come amid CEO Dara Khosrowshahi’s admission to analysts recently that UberEats was a distinct third in the food delivery space in India, and talks of a deal with multiple players, including Swiggy and Amazon, to sell its food delivery arm falling through.
Earlier this month, ET reported that Uber’s food delivery service has seen significant churn in leadership, with two top executives — India chief Bhavik Rathod and head of central operations, Deepak Reddy — resigning.
"India constitutes about 12% of trips or transactions of Uber's global volume, and is a very strategic market for us," Gupta said, adding that from an India perspective, Uber Eats is growing very substantially.
Uber, which had a market capitalisation of $53.4 billion as of Tuesday, is also investing substantial resources in its grocery delivery business. Gupta did not specify a definite timeline for that in India, but the company is expected to evaluate the local market.
“We haven’t made any decisions in terms of when we are going to do it, but it is definitely an area we are looking at, at the corporate level,” Gupta said.
Uber’s potential entry into the segment in Asia’s third-largest economy will follow that of online retail giants Amazon and Walmart-owned Flipkart, which are also sizing up plans to sell groceries and fresh food to the Indian consumer. Food is the only segment where online retailers are allowed to sell directly to consumers.
BATTLE FOR MARKET SHARE AGAINST OLA
Over the last one year, Uber has been trying to turn around its loss-making business, amid continuing market scepticism that has seen it trade well below its IPO price, since making its public market debut earlier in the year.
In India, this has resulted in scaling back investments in food delivery business, and cutting discounts to customers and incentives to drivers to curb costs.
However, from an engineering and technology perspective, the company is hiring 500 executives, including designers, product managers and engineers for its technology centre in Hyderabad.
In the second quarter, Uber’s global revenue stood at $3.16 billion on losses of $5.2 billion.
At the same time, rival Ola, which is a private company, has said it is close to breaking even this financial year.
“We don't look at what our competition is doing, as long as we are building mobility options at all price points. For Uber, we are playing the long game,” Gupta said.