(Image source from: moneycontrol.com)
The Indian operations of Uber Eats which is the business of delivering food that had been run by Uber has been acquired by an online platform for restaurant discovery and food delivery Zomato.
The Zomato has made an announcement on Wednesday regarding the food delivery business Uber Eats which is of the ride hailing company Uber being acquired by Zomato. It has also said that, 9.99% ownership in Zomato is given to Uber.
The restaurants, delivery partners and the users of Uber Eats app will be directed to the Zomato platform and the operations of the Uber Eats app will be discontinued.
It is said that it has been done for around $350 million which is Rs 2,485 crore.
The move is said to be aimed at cutting the losses at the food delivery business of the ride hailing company Uber in India which has been a drag on the earnings of the company.
Uber Eats has been started in 2017 and has entered the market scaling its business to 41 cities with more that 65,000 employees to deliver the food from over 26,000 restaurant partners. The food delivery business of Uber known as Uber Eats has been experiencing huge loss in the hyper- competitive delivery market of India which in turn lead to huge discounts by Uber Eats but the efforts put by the company has witness no valid results.
A source close to the development has said that around 245 employees of Uber Eats will be affected as they will not be absorbed by Zomato as a part of the transaction and that Uber is trying to find ways in which these employees will not be affected with the move and is trying absorb them withing its business.
The founder and CEO of Zomato, Deepinder Goyal said that Zomato along with Uber Eats will now be collectively having a share of 55% of the food delivery market and will be competing with Swiggy.
Deepinder Goyal has mentioned that zomato is currently delivering to 550 cities in India and that the delivery partners who were associated with Uber Eats earlier will now be transferred to Zomato.
The discussion regarding Uber Eats existing the food delivery businees has been in talk for several months and the decision has been taken as the company has been experiencing losses and the ride hailing company has found it difficult in curbing the losses that has been experienced.
Uber will now be concentrating and focusing only on building its ride- hailing business in India with Ola being its competitor.
The CEO of Uber Dara Khosrowshahi has said in a blog that has been posted on the website of Zomato that, India will remain as an exceptionally important market to the ride-hailing company and efforts will be put in to continue the growth of the local rides business.
Khosrowshahi has stated that the ability of Zomato to grow rapidly has been very impressive and an incredible amount has been achieved by the Uber Eats in the past two years.
Though the brand Uber Eats will not be existing in India, it is said that, the operations of the brand will be continued in the neighbor4ing countries of Bangladesh and Sri Lanka.
By Shrithika Kushangi