Don’t you love mixing things up on Saturday nights? We never know what the night has in store for us. Are we going to order in pizza or biryani, who knows? It’s really exciting! The food delivery business has become a way of life for the Netflix and chill generation. Ordering food takes just as much time as picking your movie for the night. If we want to spend an hour and a half deciding what to order and where to order from then we are queens who deserve the leisure. From today however, things might be less complicated because a giant has gone off the market and we have one less option. Indian restaurant aggregator and food delivery platform Zomato just acquired Uber Eats for $350 million or ₹2,485 crores. This is the big guns.
The Terms
News platforms have reported key factors about the Zomato – Uber deal. Ride hailing giant Uber sold its food delivery business to Gurgaon-based Zomato in an all-stock deal by diluting a 9.99% stake. Uber is not expected to make investment into Zomato, nor will they claim a board seat. Uber will have a 9.99% ownership in Zomato and Uber Eats will be discontinued. In fact, upon logging onto their app, users will be redirected to Zomato! Their delivery partners, restaurants and users will all be directed towards Zomato. About 70,000 active delivery partners on the Uber Eats network will now be Zomato’s.
Who Lost?
There is someone who might suffer the losses of this huge deal. About 245 of Uber Eats’ employees will not be absorbed by Zomato. Uber will retain some of them on their ride-hailing platform, others will be assisted with outplacement services, as per reports.
What now
Founder and CEO of Zomato, Deepinder Goyal released a statement saying, “This acquisition significantly strengthens our position in the category.” According to reports, Zomato will not have a 55% share of the food delivery market with Uber Eats in the bag, delivering to over 550 cities in India. Backed by China based Alibaba’s Ant Financial, Zomato is all set to compete with India’s largest online food ordering and delivery platform Swiggy. Times of India reported that Swiggy says they hold a 60% gross sales market share in the food delivery mark in December 2019.
Also read: These Lady Taxi Drivers Are Offering 24×7 Services For Women From Delhi Airport
What happened
Uber Eats piloted in 2014 in Los Angeles and entered the Indian market in 2017. At the time, homegrown food startups were forced to stop expansion because of a cash crunch. LiveMint reported that India’s hyper-competitive delivery market, funded by steep discounts and low value orders, has been a drag on the company’s financials. The global food delivery market is being consolidated by giant backers. Uber aims to cut losses and focus on competing with Indian ridesharing company Ola. According to filings with Registrar of Companies, Uber Eats projected a loss of ₹1,451 crore for 12-month period ending December 2020 in India. The business will be redirected to Zomato starting today (January 21). Interestingly, Ola also scaled down expansion of its Foodpanda delivery business.
Also read: Delhi’s Connaught Place To Get Its Own Smog Tower Within Next 3 Months
Uber Eats will continue operations in neighboring countries of Bangladesh, and Sri Lanka but talks about the Indian market have been going on since early 2019. Amazon India, Swiggy and Zomato were all in talks with Uber Eats before its public offering in May, as reported by Time of India. Reports also say that Swiggy could have been in the place of Zomato if not for differences in valuation besides taxation and legal issues. Well, will our Saturday nights be any different? Will we take less or more time to order in? Only queens know what queens do.
Also read: Mother Dairy Opens First Restaurant In Delhi NCR, Around 60 More To Come!