On Tuesday, Uber announced the sale of its food delivery business in India to Zomato in an all-stock deal.
As part of the deal to let Uber Eats India go, Uber will receive 9.9 per cent stake in Zomato as part of the deal whose size has not been disclosed.
UberEats’ fleet of delivery drivers as well as basic information about its customers, including phone numbers and order history, will be passed onto Zomato, the companies said in a joint statement.
Since the announcement, UberEats in India has discontinued its operations and is directing restaurants, delivery partners, and users of the UberEats app to the Zomato platform.
“We are proud to have pioneered restaurant discovery and to have created a leading food delivery business across more than 500 cities in India. This acquisition significantly strengthens our position in the category,” said Deepinder Goyal, Zomato founder and CEO.
Sources said the move is part of Uber’s strategy to be either number one or two in each of their businesses in every country they operate.
In India, Uber Eats grew very quickly to take a 12 per cent share of the food delivery market.
However, while India constituted for 3 per cent of the global gross booking of Uber Eats it also constituted for 25 per cent of its global EBITDA losses for the business segment.
Major competition in India’s food delivery market prevented India Uber Eats from taking either the first or second position, which is with Zomato and Swiggy.
Uber is concentrating on making its cab hailing business in India profitable and will expand of its network within the country from 50 cities to 200 cities this year.
“India remains an exceptionally important market to Uber and we will continue to invest in growing our local Rides business, which is already the clear category leader. We have been very impressed by Zomato’s ability to grow rapidly in a capital-efficient manner and we wish them continued success, ” said Dara Khosrowshahi, CEO of Uber.