“Zomato buy Ubereats food-delivery business in India today itself i.e. 21st January”. Ubereats was a top choice for its regular customers. Thanks to the daily offers and promo codes which makes way food pocket-friendly to order.

Even entering the Indian market in 2017, UberEats has not performed adequate inroads in the online food delivery section
Uber Eats in India will stop services and direct restaurants, delivery partners, and users of the Uber Eats apps to the Zomato platform. Zomato agrees to buy Uber Technologies’s Indian food delivery business in an all-stock deal. The deal for Uber Eats, which runs in 41 cities, in action at 3 am. And its customers have already started shifting from 7 am to the Zomato app.

Uber will, in turn, receive a 9.9 % stake in the Gurugram-based company. The deal value is at about $350 million in Indian Rupees it’s Rs 2,485 crores. All of Uber Eats business details like customer information, delivery partners, and order history will now be shifted to Uber. The Uber app will redirect users to Zomato for the next six months whenever they chose the option of ‘get food delivered’. Zomato will not absorb the Uber Eats India team.

Origin firm Uber, during the time, is shifting its sources to its core business. India remains a particularly big market for Uber and we will proceed to invest in growing our local rides business.

Uber Eats to discontinue operations in India- Why?

By selling Uber Eats in India to Zomato, Uber can cut losses while taking a post in a startup that was priced at $3 billion at first this month, when it proposed $150 million from Ant Financial.

While the Indian business had developed significantly for Uber Eats, reaching 12 %of the food delivery share, it had regarded significantly less for the overall global bookings for the food division. The division is believed to be making over 25 %global losses in EBITDA.

Uber has performed very low in the Indian market year and has been shuttering or downsizing its loss-making units and geographies. With a cash burn of $20 million per month in India, the business was between the low-priority ones for the company. Last year, Uberquarterly results report that the Indian food delivery business has been a drag for it.

According to governing disclosures made in India, Uber had predicted a running loss of Rs 2,197 crore in its food delivery business for the 5 months by December 2019. This loss was larger than what was supposed to be acquired by its core ride-hailing business. That was Rs 1,645 crore according to a valuation report provided by KPMG affiliate BSR and released in November.

What will be the biggest benefit for Zomato for buying UberEats?

With Uber Eats, Zomato will now collectively have a 55% share of the food delivery market and compete largely with Swiggy. Zomato delivers to over 550 cities in India.

Live Stronger together

With competition burning up, Uber exiting the food-delivery market is just a surprise. This deal is applicable only in India and Uber Eats will proceed to run in Bangladesh and Sri Lanka.

Even Ola, which took over the Foodpanda in a $200 million all-stock deal at the end of 2017. It had a short winning run but deep-discounting drained it. UberEats got the3rd place in India after Foodpanda immersed themselves in an offer of Rs.9 for food items,”. However, its marketing wasn’t sustainable either. 

Already, by the 4th ended March 31, 2019, the commission earned by Uber from rides had decreased 4% year-on-year, half of it attached to the increased investments in Uber Eats. It also decreased marketing spends and consumer impulses. With the Indian government warning to cap its ride-hailing commission at 10% and limit the extent of rush pricing, Uber’s whole scope turned bitter.

While Ola remains to rough it out, Uber has decided to hand over its food-delivery business to a higher, more focussed opponent.

Zomato will ensure Uber Eats India users that their user experience won’t be compromised in any way. Zomato is proud to have established restaurant discovery and to have built a leading food delivery business over more than 500 cities in India. This acquisition significantly strengthens Zomato’s position in the category.

Effects of the Deal: Zomato buy Ubereats 

About 245 Uber Eats employees are affected by the deal. However, sources in Uber India say they will be in the payrolls till March 3. And that the company is doing every effort to incorporate some of them and give support to the rest in finding jobs. These employees will not be absorbed by Zomato as part of the transaction.

“You can get rides by the Uber app, which remains active and available for Indian cab users. And one can use the Uber Eats app if he/she is traveling outside India. Till then, we hope you will enjoy many more tasty moments and discover great restaurants nearby you on Zomato. If you are looking for company registration or FSSAI License in India do contact LegalRaasta for giving its comprehensive services.