Uber is in discussions to sell its food delivery business in India as the company faces losses. The ride-hailing firm is close to closing a deal to sell its Uber Eats service operating in India to Zomato. The sale is expected to be announced as early as this week according to sources at Uber Eats. The deal is expected to be valued at 400 million dollars. Uber’s chief executive, Dara Khosrowshahi has been trying to cut corners on money-losing businesses in order to prove to the investors that the company is capable of returning profits. Ever since Uber has gone public, investors have been agitated and have asked that Uber cleans up its balance sheets.
The initial public offering in May was disappointing as the company’s shares plunged which led to investors questioning the losses accumulated by Uber. Investors have recently complained about several issues at Uber. The issues include continued regulatory challenges globally. For example, transportation authorities in London have stated that they would not be extending Uber’s taxi license. Investors have grumbled that Uber has paid too much because of Careem, a Dubai based ride-hailing and delivery company that Uber said it would acquire for 1.3 billion dollars. Mr. Khosrowshahi, in a conference call with investors last month has stated that his plan for Uber Eats was to be the primary or at most the secondary service in every city it operates in. “If we can’t make it to that level, we’ll look to dispose or we’ll get out of the market,” he said at the time.
The Indian market is dominated by startups like Zomato and Swiggy and Uber Eats has a difficult time signing up restaurants. Recently, Uber has announced that it was cutting its Uber Eats business from South Korea where the business faced very tough competition from other startups.