Cab hailing service Uber has announced its financial report for the first quarter of 2020 ended March 31 and it shows a pre-tax gain of $154 million through the sale of Uber Eats’ India business to online food delivery major Zomato.
To recall, Zomato acquired Uber Eats India in an all-stock transaction for $206 million in January this year. This deal also gave Uber a 9.99% ownership in Zomato. While the investment was valued at $171 million, the remaining $35 million was received as a reimbursement of goods and services tax receivable from Zomato.
On a pre-tax gain of $154 Million, Uber Eats India’s other transactions and related costs amounted to around $10 million, a company statement said.
The overall revenue of Uber rose 14% year-on-year to $3.54 billion in the quarter ended March. Though, the company posted a loss of $2.9 billion during the same period which included a $2.1 billion pre-tax write-down of the value of some of its minority investments.
Commenting on the company’s performance during these 3 months, Uber CEO Dara Khosrowshahi said, “While our rides business has been hit hard by the ongoing pandemic, we have taken quick action to preserve the strength of our balance sheet, focus additional resources on Uber Eats, and prepare us for any recovery scenario.”
Uber CEO also highlighted that the company aims to be the number one or two players in the market it operates in, rather than being the number three or number four.
It is important to note that before the Uber Eats- Zomato deal, Zomato was the biggest player in the Indian food delivery industry, followed closely by Swiggy. Uber Eats, on the other hand, was a distant third. After acquiring Uber Eats, Zomato took a leap and left Swiggy far behind.
After the government allowed cab-hailing apps and taxis to operate from May 4 in green and orange zones, Uber had resumed its operations in 31 Indian cities, Whereas its rival Ola has started operating across 100 cities. Their operations were on halt because of the national lockdown which began on March 24.
This also comes in the backdrop of Uber being in the process of letting go of around 500-700 employees from its India office in the coming two weeks.
