Uber has been selling off its local businesses in big emerging markets like China and Southeast Asia. But the company’s India unit isn’t going anywhere.
In an email obtained by CNBC, Uber’s India head Pradeep Parameswaran told company executives, including CEO Dara Khosrowshahi and CFO Nelson Chai, that Uber India reached an annualized bookings rate of $1.64 billion in the third quarter.
Parameswaran wrote that Uber will close the year in its “strongest position ever — as the ride-sharing leader in India.” He said the company doubled its engineering team as of the third quarter and plans to double again next year in its two big hubs of Bangalore and Hyderabad.
India marks Uber’s last stand in Asia. The San Francisco-based company spent billions of dollars building its business across the region, before ultimately consolidating with local players. In 2016, Uber sold off its China operations to Didi Chuxing for a 20 percent stake in its former rival, and in March of this year Uber sold its business in eight countries across Southeast Asia for a 27.5 percent stake in regional leader Grab. Uber also merged its Russian business with Yandex in 2017.
But India has presented some problems for Uber as well. In 2014, a 26-year-old woman in New Delhi was raped and assaulted by a driver, who was arrested and sentenced to life in prison. Uber was banned from operating in New Delhi from late 2014 until mid-2015.
Eric Alexander, the head of Uber’s Asia Pacific business, was fired in 2017 after reports that he obtained the medical records of the woman who had been raped and showed it to executives including then CEO Travis Kalanick.
But the company appears determined to stick it out. Earlier this year, Khosrowshahi told local media that India was one of the company’s healthiest markets and that “we believe in controlling our own destiny in India.”
In a statement to CNBC, Uber said that “India remains a globally strategic market.” The company plans “to invest heavily in our people and our products in India, and we’re excited about what’s ahead,” the statement said.
India now accounts for 11 percent of all the company’s trips across the globe, Parameswaran wrote in the internal email, but he only provided a gross bookings number for the country and didn’t include revenue. Gross bookings reflects how much Uber makes before paying drivers, a percentage that varies across markets.
On a global basis revenue amounted to 23 percent of gross bookings in the third quarter, Uber said last month. The company reported 38 percent revenue growth in the quarter to $2.95 billion on $12.7 billion in gross bookings.
Parameswaran said that the India business added 1.5 million new users through Uber Lite, a minimal version of the app that saves space and bandwidth for customers in emerging markets. He also said that Uber Eats grew sevenfold over the past four months, capturing almost 20 percent of the India market in just 18 months, he said.
While Uber is expressing its commitment to India, the company has backed out of other markets after similar commentary. In November 2017, Khosrowshahi said “we’re going in and we’re leading forward,” when asked about Southeast Asia. A few months later, Uber announced its retreat.
At the same time, there are growing concerns about Ola, India’s local ride-sharing giant, which has seen a number of high-level executive departures.
According to a report India’s Economic Times, Japanese conglomerate SoftBank has offered to invest as much as $1 billion in a new financing round for Ola. SoftBank is a big Uber backer and an Ola investor, participating in a 2014 round that valued the company at $1 billion according to Pitchbook. Its most recent round, raised in September of this year, valued Ola at $4.3 billion.
At this point, Softbank does not expect to put additional money into Ola, according to two people familiar with the matter who asked not to be named because its funding plans are confidential.