Uber’s Food Distribution
Business, Uber Eats, is gearing up to sell its Indian operations to a rival
food distribution company, Swiggy in the country.
According to a report by The Economic Times, the transaction is expected to be closed in March, citing privatization of three people for development and it will mark the biggest purchase for Swiggy. It also marks the first sale of Uber’s food business worldwide. Under the deal, sources told The Economic Times that Uber would get a 10 percent stake in Swiggy, which is worth 3.3 billion dollars.
To reduce the deficit for the potential initial public offering of Uber, the move mounts with the aim of Uber. The value of Uber Eats is more than $ 20 billion, which brings revenues of $ 1.5 billion in the first quarter of 2018, the report said. A source told the paper, “It is sensible to invest in Swiggy rather than burn capital to compete for the same set of restaurants and consumers.” This person said, “Some rationality should be brought in the cash-guzzling food-delivery market,” the person said that the discount is likely to reduce post-integration.
Along with Swiggy, the opponent Zomato is successfully raising the venture fund and the customer is aggressively following. At the same time, another delivery service, Uber Eats and Foodpanda, is offering big discounts, as a result the companies are burning to compete through cash. Uber Eats, for example, burns around $ 9 million a month for $ 25 million, in the meanwhile Swiggy burns approximately $ 40 to $ 45 million a month. Paper note Uber had discussed with Zometo, but nothing came of it.
The sale of Uber Eats in India also comes because its opponent Ola has pulled back on its food business, which operates under the name of Foodpanda, and has increased the supported marketing and customer acquisition costs to almost two-thirds.