Uber’s new Chief Executive Officer, Dara Khosrowshahi, dismissed rumors during a presentation in India about a potential merger with ridesharing service Ola, saying instead that he plans to invest more in the company’s India business, which has been suffering recently from losses.
According to news from BGR, citing an interview with ET Now, the executive said a merger with Ola is “fun to speculate,” but he otherwise brushed off the question. “My focus is on our quality of operations and our teams; that’s why I’m here. I’m here to meet with our teams, ministers, etc, to understand the market, and, at this point, I’m not really focused on M&A,” Khosrowshahi said.
Meanwhile, the CEO announced Uber plans to use profits from its business in the U.S. and Europe to improve its losses in India.
“I think we’re going to be quite aggressive in India as far as investment goes. One of the great structural advantages that we have at Uber is that we have many profit pools. Those profit pools in the mature markets in the U.S. and Europe allow us to actually lean into some of the developing markets,” Khosrowshahi said.
Citing previous media reports, BGR revealed that Uber and Ola have lost billions of dollars during the past four years because they subsidize rides for clients and give drivers bonuses.
The comments from Uber’s new CEO come as reports recently surfaced that the ridesharing firm is selling its business in Southeast Asia to Singapore-based Grab. In return, Uber will obtain a substantial stake in the ride-hailing platform, sources close to the potential deal told CNBC.
However, Uber and Grab have not reached a deal as of the writing of this article. It’s not clear when, or if, the companies might do so. If the deal goes through, it would be in line with Uber’s previous moves. For example, Uber sold its ride-hailing business to Didi Chuxing, the leading car-sharing company in China, in return for a 20 percent ownership stake in the company. In Russia, Uber merged with Yandex’s ridesharing business to create a new company, in which it would own a 36.6 percent ownership stake said to be worth almost $1.4 billion. The goal behind both deals is to help Uber cut its costs as it eyes an initial public offering (IPO), according to CNBC sources.