Ride-hailing platforms Ola and Uber are reportedly in talks for a possible merger.
Ola chief executive officer (CEO) Bhavish Aggarwal recently met top executives of Uber in San Francisco, Economic Times reported citing sources privy to the matter.
On the other hand, Aggarwal and Uber separately and vociferously denied the report.
“Absolute rubbish. We’re very profitable and growing well. If some other companies want to exit their business from India they are welcome to! We will never merge,” tweeted Aggarwal.
In a statement, Ola said that it is one of the most profitable ride-hailing companies in the world with a strong balance sheet, and ruled out any merger. “We are the market leader in India and are much bigger than other players. Hence, merger of any kind is completely out of the equation.”
Ola also said that it is open to acquisitions to consolidate its position in the Indian market.
“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,” it said.
Meanwhile, Uber told Reuters, “That report is inaccurate. We are not, nor have we been, in merger talks with Ola.’
This is not the first time that there talks of merger between both the companies. In 2018, it was widely reported that SoftBank, which is an investor in both the companies, was pushing for a deal under which Ola would acquire Uber’s operations in India.
The deal seems to have been revived in the recent months as both players appear to be in doldrums, marred by stagnant growth and rising costs, the ET report said.
Uber recorded a net loss of close to $6 Bn in the first quarter of the current year 2022 (CY22), largely due to unrealised losses from its stakes in Didi Global, Grab Holdings and Aurora Innovation. Driver shortage and rising petrol prices have compounded problems for the US-based ride hailing giant which has been under intense scrutiny in India ever since a tranche of controversial data was leaked as part of Uber Files.
On the other hand, Aggarwal-led Ola has also been plagued by its own set of problems. A slew of debacles while diversifying its portfolio has led to the company shutting down its quick delivery and used car businesses. The startup also seems to be more focused on its electric vehicle (EV) arm Ola Electric.
According to a report, Ola is also in the process of laying off around 1,000 employees across multiple verticals to focus on its EV business.
The EV business has also been under increased scrutiny over fire incidents. Besides, it has also been plagued by delivery issues and maintenance problems that have been highlighted by customers on social media lately.
The two players are also in dock in the country for abuse of dominant position. In May this year, the Central Consumer Protection Authority (CCPA) issued notices to both Ola and Uber for unfair trade practices and violation of consumer rights.
Ola and Uber have repeatedly been reprimanded by authorities for a lack of redressal system, poor customer service, shoddy services in the form of cancelled rides, among other issues.
Interestingly, the US-based ride hailing had recently rejected a recent news report that suggested that Uber explored the sale of its India business to Ola a year ago.
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Ride-hailing platforms Ola and Uber are reportedly in talks for a possible merger. Ola chief executive officer (CEO) Bhavish Aggarwal… News, B2CInc42 Media