Uber Sells India Food Business to Rival Zomato to Cut Losses

The ride-hailing giant agreed to sell Uber Eats in India to rival Zomato, continuing its recent efforts to exit money-losing businesses.

Uber agreed to offload the business in return for 9.99% of the Indian startup, maintaining a foothold in one of the world’s fastest-growing internet arenas, the companies said in a statement. As part of the deal, the U.S. company will shutter operations but direct all restaurants, delivery companies and diners to Zomato.

Neither company offered up financial details but the person said the value of the Zomato shares Uber gets is estimated at about $172 million — the Indian startup was last valued at $2.2 billion.

The deal marks yet another leg in a wave of consolidation sweeping the food delivery sector. Uber, which is trading well below its IPO price, seeks to hive off loss-making operations to achieve its goal of being profitable on an EBITDA basis by 2021. While it will continue to vie with Ola — also backed by SoftBank Group Corp. — in ride-hailing, exiting the food business can help staunch bleeding in one of the most competitive markets in the region.

SoftBank founder Masayoshi Son has impressed upon the companies within his massive portfolio the need to curtail excess and focus on the bottom line.

“The competition in this space is going to continue to be intense, and the food delivery category is still very small compared to the overall food service market in India,” Zomato founder Deepinder Goyal said in a blogpost. “Through this deal, Uber Eats India users now become Zomato users. I want to assure Uber Eats India users that their user experience won’t be compromised in any way — if at all, the scale gives us higher density to make our deliveries faster.”

Uber’s sale of its Eats business in India makes sense, and echoes a similar step in South Korea as it cuts ties with unprofitable markets. Pulling out of India could kick up a 500 basis-point headwind to the Eats segment’s sales growth yet deliver a 10 percentage-point boost to its Ebitda margin, which remains substantially lower than those of peers such as Just Eat and Grubhub — Mandeep Singh, analyst.

a man in a blue shirt: When you think of some of the world’s most recognizable brands, what comes to mind? McDonald’s? Starbucks? Nike? Sure, all of those companies can be found in small towns in the Midwest and even on the streets of Budapest.

But though those companies may have thousands of locations around the world, that doesn’t mean they employ the most workers.In the following slideshow, Stacker lists the 50 companies that employed the most people globally as of the end of fiscal year 2018. The list includes both public and private employers, ranging from for-profit retail companies to citizen-serving government agencies.

To create the list, Stacker used data from Statista released on July 31, 2019, and checked information from company websites, primary sources, and recent news articles. In the 21st century, China emerged as an economic giant and notches several companies on the list—companies that employ millions of total workers around the world. The United Kingdom earns a few mentions, as do the United States and Russia. When it comes to specific industries, Telecom companies have become major employers over the past two decades, but there are still a bunch of good, old-fashioned conglomerates that are always on the search for new blood.

These companies didn’t become powerful by sheer luck. In some cases, factors such as war or government restrictions affected how future markets were shaped. Other businesses may have just struck while the iron was hot, achieving rapid growth in a relatively short period (a majority of companies on the list were founded within the past half-century).
As for the biggest employer in the world? It may come as a surprise when you have names like Buffett and Jobs dominating business headlines, but you can never underestimate the impact small-town America plays on the global economy. Read on to see how many employees work for the world's biggest companies.You may also like:  Counties in every state with the fastest growing income

Uber started its food-delivery business in India in 2017 with much fanfare and a huge marketing budget. The San Francisco-based company has since poured resources into the operations to lure users with bargain food deals delivered to the doorstep, but it’s pitted against competitors with powerful investors.

Naspers-backed Swiggy and Zomato, backed by Jack Ma’s Ant Financial, now lead India’s food-delivery sector, which like elsewhere is showing signs of consolidation. Bangalore-based ANI Technologies Pvt, which owns the Ola ride-hailing brand, acquired the Indian unit of Foodpanda in December 2017 and also faces an uphill struggle against the two established players.

Uber, whose shares are down 22% from their 2019 IPO price, said it will continue to expand its core Indian business after unloading Eats. Employees that lose their jobs as a result of the deal can reapply for other roles within the company, the person said.

“India remains an exceptionally important market to Uber and we will continue to invest in growing our local rides business,” Uber Chief Executive Officer Dara Khosrowshahi said in the statement.

January 21, 2020