By June, ride-hailing app Uber is planning to invest $500 million in India to take over its rival Ola. Uber will use the cash to invest in government collaborations, business partnerships, strengthen its driver supply initiatives, marketing and expansion.
Just nine months ago, the world’s most valuable startup committed to invest $1 billion in India. However, it is yet to utilise all the cash from the first $1-billion commitment.
Uber and Ola are engaged in fierce competition, sometimes bad-tempered, to dominate in India. At present, Ola has a 15-20 per cent lead on Uber. However, Uber has eaten into Ola’s market share in top cities, which Ola is now vigorously defending.
Both Ola and Uber get more than 70 per cent of their revenue from Bengaluru, Hyderabad, Chennai, Delhi-National Capital Region and Kolkata. Ola has raised a total of about $1.2 billion so far, including $500 million in November from investors including China’s biggest taxi aggregator Didi Kuaidi that is building a global alliance against Uber. At the time, Ola was valued at $5 billion.
Uber and Ola are also fighting pitched battles in the Delhi High Court. The Bengaluru-based company has accused Uber of violating rules and operating cabs that use diesel as fuel. Uber has denied the charge. For its part, the US company has sued Ola, accusing it of using a range of dirty tricks, including creating fake bookings.