Ride-hailing app Uber entered the food delivery business in India two years ago. Now, it seems like the app didn’t like the flavor of the segment as it is soon to wrap up its food delivery business, Uber Eats in the country, as reported by sources familiar with it.
According to a report by the Economic Times, UberEats is in the final stage of acquirement by rival food delivery service Swiggy in the country.
The acquisition is likely to take shape next month, which will result in a 10% share by Uber in Swiggy, which is currently valued at $3.3 billion.
The acquisition is aimed at cutting down on Uber’s global losses which include a public offering of around $120 billion.
“It is prudent to be invested in Swiggy than burn capital competing for the same set of restaurants and consumers. This should bring some rationality to the cash-guzzling food-delivery market,” said a close source.
For the uninitiated, UberEats in its first quarter of business in India was able to cross $1.5 billion of sales. However, failed to keep up with the competition.
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The food delivery market is currently being ruled by Swiggy and Alibaba-owned Zomato, along with Ola-acquired FoodPanda which is presently focusing on its private brands such as The Great Khichdi Experiment, Lovemade, and FLRT.
Whether or not the idea of exiting the food delivery business is profitable, only time will tell.
For further updates, stay tuned to Fossbytes!