The Strategist

Uber’s Deal with Times Internet in India

04/07/2015 - 20:36

Times Internet is investing in Uber to fund its expansion in India.

Uber’s Deal with Times Internet in India
Uber has entered into a strategic agreement with Times Interest to facilitate the company’s expansion in India. The marketing agreement with one of the world’s most popular start-up was worth $24 million. This alliance is not strange for Uber, as it has entered into similar kind of partnerships in different markets across the world. For instance, AmericaMovil in Latin America, Baidu in China and American Express in the US. Besides, assisting in marketing and distribution, these companies have helped the company in understanding the consumer behavior and the overall market.

The partnership with the digital arm of Times of India will help in expanding its operations in the fastest growing market. However, the company is facing regulatory challenges as the Indian licensing rules does not permit the kind of cab services the company provides. Since its launch in India in 2013, the company extended its business to nearly 11 cities. In contrast, Olacabs facilities are spread to almost 67 cities across the country with 100,000 vehicles offering the services. The recent acquisition has added further TaxiForSure’s 15,000 cars moving across 47 cities.

India’s biggest cab hiring start-up is Olacabs. The company acquired its rival TaxiForSure for an amount of $200 million and thereby created huge pressure for Uber. TaxiForSure is also the second biggest startup after Olacabs in India. Both Olacabs and TaxiForSure will be operating as distinct entities. Due to this acquisition, Uber is lagging behind in the race to attain the top position for providing cab services in India. Besides, SoftBank has given strong competition to Uber across the world. Grabtaxi, one of the direct rival of Uber has sold its stakes to SoftBank.

The combination of Uber and Times is aimed against Olacabs, India’s leading cab service provider which accounts for nearly 80% of the market share post TaxiForSure acquisition. With the objective to establish its dominance in Indian market, the Olacabs that is supported by Japan’s SoftBank is expected to raise huge investments. This cab market has low entry barriers thereby making it highly competitive and as far as the app developments are considered the strong network between consumers and drivers establishes a competitive advantage for the companies.

The Times Internet websites includes the online version of the Times of India and Economic Times that received was accessed by 37 million visitors per month. Uber is expecting to expand its business operations in India with the help of their market insights. Uber gains access to all kinds of advertising vehicles provided by Times Internet that includes the marketing services provided by all media companies worldwide.

Presently, Uber is dependent upon Google Inc and Apple Inc maps. But as a result of its recent acquisition, it will start making its own maps. Moreover, Google possess a stake in Uber and is also a board member of the company. However, some differences have developed among the two companies, when it Google disclosed about its interest in ride hailing business.

Tags : Uber