Uber says profitability isn’t far away in India

Pradeep Parameswaran, Uber’s regional general manager for the Asia-Pacific region, said, “It’s a steady March. Every year, our unit economics is getting better than the previous year. So we don’t have an exact timeline to be profitable.” . India. But I would say it’s not that far off either.”

Speaking to the media in Sydney last week, Parameswaran said that before Covid in India, the category of people who could afford Uber services was growing at a rate of 15-20%.

According to Parameswaran, ride-hailing penetration in India is 0.3%, which is a tenth of the penetration numbers in markets like the US.

Parameswaran also rubbished reports of a possible exit from India or a merger with competitor Ola.

He said, “Frankly, we have a runway for over the next decade (with respect to demand). Our unit economics have improved dramatically in the last three-four years. I love that we Where are you on that journey, and with time, I have no doubt that India will be a high-growth market, which will also be profitable,” he said. “But right now, we are in the investment phase, such as inter-city, high-capacity vehicles (HCVs); We have to spend on marketing, technology and customer care etc.”

The June quarter was a milestone for Uber worldwide when it reported its first cash flow positive quarter since it was founded 13 years ago. The company reported a loss of $2.6 billion for the second quarter (of which it attributed $1.7 billion to investments and revaluation of stake in Aurora, Grab and Zomato) and posted $382 million in free cash flow. Total revenue for the June quarter stood at $8.07 billion. Uber does not provide individual country figures.

The company sees India as a long-term investment and is looking to push two-wheeler and three-wheeler products in the country. According to a report by Public First commissioned by Uber, indirect effects such as driver-partner earnings and car maintenance created economic value. 44,600 crore in India in 2021. The report also estimated that Uber created a consumer surplus of 1.5 trillion in India last year.

According to Parameswaran, expanding the modes of transport and improving the quality of service, which has declined due to shortage of drivers and high fuel cost after the pandemic, are among the major concerns for the company right now. Uber Moto and Uber Auto, which offer rides on motorbikes and auto-rickshaws, are among the fastest growing segments for Uber in India. However, the company said expanding in both markets has been difficult.

“On three wheelers, some states are directly saying that your license does not apply. So, we’re stuck in knots of bureaucracy that are inefficient,” said Mike Orgill, senior director, public policy and government relations, APAC at Uber. which is not a commercial vehicle” affected the moto business.

Orgill also said that Uber has “encouraged” the government to open the ride-hailing space to everyone so that no one can apply for a commercial license as long as they meet safety standards and pay the appropriate taxes. Can drive a car without on a platform like Uber. He said that the rules and regulations applicable to two-wheelers and three-wheelers in India can set an example for countries in Latin America, the Middle East, South America and other places where such transportation is common. India’s Social Security Code, 2020 also puts it at the forefront. Others in terms of making labor laws for gig workers, according to Uber.

“We want results-focused regulation so that if we start seeing better ways of doing things with technology, we’ll be glad the government takes a look at it and finds out if it’s good,” Orgill said. Told. “Are we trying to say what exactly are you trying to achieve in terms of safety, customer safety, driver welfare outcomes, and in terms of how we set them as targets? How are you doing. Because once you’re prescriptive, we’re locked into doing it as prescribed, and the government is running business when we think there’s a technology we can take advantage of, “They said.

Lastly, the company said that it wants to deploy more electric vehicles (EVs) in India in the coming years. While it has no electric vehicles in the country, Uber has promised a full-electric fleet globally by 2040.

The author was in Sydney, Australia at the invitation of Uber.

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