Uber Eats, Uber’s food chain start-up and also 3rd largest food Delivery Company in India has been sold to Zomato, number one and largest shareholder in India’s food Delivery Company in a record deal.
Uber gets a stake of 9.9 percent in the current deal with Zomato and this deal was signed between two food delivery majors at 3 AM and Uber reported that all the Uber-Eats customers will be transferred to Zomato by 7 AM. Though the amount in the deal was undisclosed, sources estimate that the deal value would be around $300 million to $400 million.
This deal is said to be valid only in India and Uber Eats will continue to run under the same name in other countries such as Sri Lanka and Bangladesh. Currently, Uber Eats operates in 41 cities, including tier II cities.
Uber Eats was first launched as Uber Fresh in 2014 in Los Angeles, United States of America and with a lot of competitions already, Uber Eats had a tough 1st year after which the company conquered the food business in the US beating all its competitors such as Grubhub, Postmates, Caviar, Seamless, Spring. Uber Eats was launched in India in 2017 and started off their journey from Mumbai and later on expanded to other cities. It was expected to be a game changer in the food delivery business. Uber Eats started off well giving a tough competition to both of its rivals, Zomato and Swiggy. Uber Eats also tied with some of the top restaurants to exclusively deliver the food and provide exclusive offers. Uber Eats also merged with Uber Ride app so that the customer can easily book the food along their journey.
The sudden deal between Uber and Zomato was an unexpected one for the consumers but it was a planned move by Uber as they look to maintain their top position in their main businesses. This deal makes Zomato number one in food delivery business in India beating Swiggy. Even though Uber Eats India made up 3 percent of its total business around the world, it also contributed about 25 percent of the company’s total loss globally. Since they already maintain other top businesses in other countries, they look to concentrate more on their cab hailing business and expand their network to a new tier II and tier III cities. The deal also gives improved financial stability for Uber Eats around the world. The deal also said to be a setback for many of the workers at Uber Eats as they are set to lose their jobs due to the merger.
Uber is concentrating on its cab aggregator business in India and is looking forward to expand the business from current 50 cities to 200 cities by the end of the year.
Zomato CEO Deepinder Goyal is said to be happy with the merger deal and tweeted that Zomato is looking forward to improve the food deliver segment and expand its network of quality food delivery all over India.