Ola and Uber are in talks for a possible merger, who revealed that Ola’s co-founder and CEO Bhavish Aggarwal met top Uber executives in San Francisco, US recently. This is as per a report in the Economic Times.
Both companies had held conversations four years ago as well, when common investor Softbank had pushed for a merger. A deal did not materialise back then. Those conversations seem to have revived in recent months as both Uber and Ola are facing growth pangs.
The cab hailing companies fiercely competed against each other to dominate the Indian market and spent billions of dollars on driver incentives and discounts to passengers. However, intensity of the competition died down in the recent years as the pandemic dampened demand for app-based cab hailing in India with both companies cutting flab and tightening operations.
Ola has shut its quick delivery and used car businesses already with the company deciding to focus on its core mobility with a leaner team. The latest round of layoffs at Ola, which was initially estimated to be around 500, might see as many as 1000 people losing jobs.
Meanwhile, a month ago, Uber had strongly denied any move for a sale while reacting to a Bloomberg report that suggested the company had explored a sale of its India unit a year ago.
However, an Ola statement suggested that rather than merger the company would look at acquisitions to consolidate its position. “Ola is one of the most profitable ride hailing companies in the world with a strong balance sheet. We are the market leader in India and are much bigger than other player. Hence, merger of any kind is completely out of the equation. We believe that India has a lot more opportunity to unlock when it comes to mobility services. As a strong vertically integrated mobility company we will further consolidate our position by any acquisition in the Indian market, if at all.”
After the story was published an Uber spokesperson responded. “We are not, nor have we been, in merger talks with Ola,” said Uber spokesperson.