Why is taxi-hailing app Uber doubling down in India and China? Last month, the San Francisco-based company closed $1 billion in fresh funding, raising its valuation to $50 billion-plus. The fund-raising coincided with its announcement that it was going to invest $1 billion in India over the next nine months. Only the previous month, Uber had bared its intentions to pump in $1 billion this year into China to play catch up with Didi Kuaidi, which has reportedly outgunned the US challenger in that huge market.
According to Greyhound Research Chief Analyst & CEO Sanchit Vir Gogia, Uber has made a place for itself in the Indian market despite the setbacks it had to face. “Its recent announcement on providing free rides in sports cars and Uber Puppies comes as a move to lure customers to try Uber as compared with its competitors. Uber tied up with Indian mobile payment platform PayU and digital wallet Paytm, post RBI’s concerns over violations of India’s forex laws. It is also testing its cash-based model in Hyderabad to tap into the segment where Ola and Meru pick up the maximum market share,” he said.
But Gogia, for one, thinks regulatory concerns have receded. According to him, what Uber faced in India can be categorised as teething problems that any new entrant would face. “Over time the Indian government and Uber will have to meet midway to work on legal and regulatory issues. With the recent announcements by Uber, it only goes to show that it is here to stay,” he said.
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