Uber India to expand its business through car rentals and shuttle services

After withdrawing from food delivery services, Uber is in talks with car rental services in India to offer self-driving car rentals and shuttle bus services in India.

Uber India is already in talks with mobility firms such as Drivezy, Zoomcar, Bounce, and Revy to kick-start their new initiative. The cab-hailing app will bring self-driving four-wheelers from these platforms to their Uber app for rentals.

However, in 2017, Xchange Leasing, a subsidiary of Uber, had to be closed owing to high costs.

A person associated with Uber India, who wishes to remain anonymous revealed that Uber India plans to launch the full service sometime during this year in one or more cities. The person said, “The plan is to offer high-capacity vehicles that can seat anywhere between 12 and 25 commuters.”

Uber’s shuttle services launched in Cairo in December 2018 allows its users to book bus seats. However, this rental business will be the first-ever business venture of its kind taken up by Uber anywhere.

Uber’s shuttle service will take on existing players such as Amazon-backed Shuttl, which has raised over $70 million and operates in New Delhi, Chennai, Kolkata, Pune, and Hyderabad.

Uber India backed out of the food delivery business in January 2020 and sold it to Zomato for $350 million. The only two existing opponents in the food delivery business are Swiggy and Zomato, and both the companies are facing huge losses. Its US parent, Uber Technologies, is still recovering from a disappointing initial public offering in 2019.

Uber already has a two-wheeled electric scooter sharing platform with Yulu in Bengaluru. However, getting into two-wheeler renting business is also expensive in India, and the acquisition-led strategy decreases financial liability for Uber when compared to investing in assets directly.

The ride-hailing market in India is expected to touch $43 billion with an estimated 4.2 million vehicles plying on the roads by 2025, estimates from market research firm Frost and Sullivan showed. Currently, there are around 2 million vehicles in the ride-hailing segment in India, and a large part of it is dominated by Uber and its rival Ola in India.