Uber Sells Food Delivery Business to Zomato
On Tuesday, Zomato has acquired Uber Eats in India, and according to the sources the deal value is around $300-350 million. With this deal, Uber will have a 9.9 per cent stake in Zomato. It is believed that the deal for Uber Eats was signed at 3am and the customers were shifted to the Zomato app from 7am. Uber agreed to sell Uber Eats after its recent efforts to exit money-losing businesses.
Uber claimed that, the deal is applicable only in India and Uber Eats will be continuing to operate in Bangladesh and Sri Lanka. The delivery drivers for the service, known as Uber Eats, and basic information about customers, including their contact numbers, order history and more has been transferred to Zomato. When Indian users click on the ‘Food Delivery’ option, the users will be sent to Zomato app for six months.
However, the two local food delivery leaders namely, Zomato and Swiggy has already established in the country and controlling about 80 per cent of the food delivery market here. Zomato claims that Uber’s 10 million monthly food orders will be added to their 40 million which strengthens their customer base in southern India, which is Swiggy’s stronghold.
Even though Uber’s ride business is hailing across the country, Uber Eats never tried to attract any restaurants or customers in India. For the first three quarters of 2019, Uber Eats only recorded for three per cent of the gross booking for Eats globally and at least 25 percent of its adjusted operating losses. Also, Uber is trying to expand its network within the country from 50 cities to 200 cities this year.
But, it is said that almost 245 Uber Eats employees are affected by the deal, but sources confirm that they will be under the pay rolls of Uber India till March 3 and company aims to provide support to the rest in finding jobs. Similar to this, Uber also pulled from South Korea in September and sold its ride-hailing business to a local competitor in 2018 in Southeast Asia.
Since its inception in 2008, Zomato has come a long way after starting as an online guide, which scanned menus from restaurants and later added reviews, reservation features, and food delivery. Last month Ant Financial added $150 million to Zomato’s coffers in a fund-raising round. With an aim to increase revenue, it also began a loyalty program in 2017 named ‘Zomato Gold’ which gave diners buy-one-get-one-free deals at thousands of restaurants.
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