Earlier this year, one of the hottest startup competitions within continental Asia ceased fire, with Uber and Didi Chxxnxg (Didi) calling for a truce, before announcing a merger. While this battle represented one of the most intense fights Uber was waging in Asia, the other notable battle is one with Ola in India. With their attention turned away from the Chinese market (thanks to their merger), the question that arises is: What's next for Uber in India? It would seem that a majority of their Asian focus has now turned towards India. To give a little background on the Uber-Didi deal: Uber secured a 20% stake in the combined entity, now valued at $35 Billion, up from $28 Billion before the deal was struck. The deal came at the end of a massive round of funding headed by both companies. Didi raised close to $7 Billion from multiple investors (including $1 Billion from Apple) and a $2.5 Billion debt package from the China Merchants Bank. Meanwhile, Uber raised a whopping $3.5 Billion from the Saudi Arabian sovereign wealth fund. The questions arising post the merger are best articulated by Dhananjay Sharma, Associate Consultant, RedSeer Consulting. He said, "China was a bleeding market for both Uber and Didi because of intensive cash burn for customer acquisition. Now, as Uber China merges with Didi, it will likely be a win-win situation for both from the business sustainability perspective. It will certainly be interesting to see how this development impacts Uber's strategy in India going forward, now that Uber is free to focus entirely on winning the Indian market."As could be expected from the announcement of the deal, the past few months have seen aggressive moves from the part of Ola to consolidate their higher market share position in the Indian subcontinent. Most recently, they have announced tie ups with Mahindra, Practo (for doctor visits), corporate travel, location mapping with Siri, offline booking and most importantly a tie-up with the Karnataka State Tourism Development Corporation to launch exclusive tourism flights from Bengaluru to Mysuru. This collaboration is especially vital because it comes at a time when State Government sentiments regarding taxi aggregators and their surge pricing mechanisms are coming under scrutiny. Collaborating with a government agency further solidifies their position in the marketplace.Uber, meanwhile is not far behind with the San Francisco based startup announcing 'book later' facilities, corporate plans and offline calling facilities of their own. Reports over the last few month also speak of the massive amount of cash being burned by Uber in India to recruit new cabs, and opening up cash payments and call facilities (at least one of these services just became redundant with the recent demonetization). "What happened in China was unexpected, and investors now just want to wait and see how the market shifts. Uber has deep pockets that it is willing to pump into India. And Ola has to face a wary investment community," says Dhananjay.Amidst the intense cash dumping by Uber, Ola is now realizing their limited ability to do the same and are pushing for the need of regulation, but in overall macro-economical terms, competition creates value and ensures quality of services to its customers, therefore spelling a good outcome for us all. Grab your seats, because this fight is just getting started!
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