InvestorQ : Why has Uber Eats sold out to Zomato its food business?
Anjana Aiyar made post

Why has Uber Eats sold out to Zomato its food business?

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Arya Nanda answered.
2 years ago
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Uber Technologies will be selling Uber Eats in India to local rival Zomato. This is part of the efforts by Uber to cut back on loss-making operations globally. This has been necessitated due to mounting losses at its global business. Uber will offload the eats business in exchange for 9.9% of the Indian start-up. Details of the deal were not disclosed.

This marks another round in a wave of consolidation sweeping the food delivery industry globally as technology is making things quicker. Uber has been looking to hive off loss-making operations to reach its goal of being profitable on an EBITDA basis by 2021. It will refocus its energies on the cab hailing franchise where it is in direct competition with Ola in India.

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2 years ago
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Uber has committed to a global policy of spinning off or selling non performing and loss making entities. This sake is in line with it's policy.

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Roshni Hegde answered.
2 years ago
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In the existing competition of the food delivery business in India, after the acquisition of Uber Eats by Zomato it is quite sure that Zomato and Swiggy will now automatically share an overall 50-55% in the market.

Alibaba's Financial-backed online food delivery and restaurant discovery platform Zomato has taken Uber Eats, the food delivery business. the deal for Zomato cost for around Rs 2,485 crore ($350 million). The deal includes the norm that Zomato will not take over Uber Eat employees, that means other employees in Uber's other verticals could face lay-off. After the acquisition, Uber Eats will no longer exist as a separate Uber brand in India. All the customers will be automatically redirected to Zomato's app.
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