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Uber looking to invest approx. 13,000 crore to buy 200K cabs for its fleet expansion programme

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Caught amid a fierce war in India, ride-hailing giants Ola and Uber are trying to push boundaries to capture a majority of the market. Following pursuit to the Indian cab aggregator, Uber is mapping a game plan to envelope even more driver partners in addition to opening business opportunities for the automobile manufacturers.

The American cab aggregator Uber, which likes to do things on a large scale, is planning to buy as many as 200,000 passenger vehicles(cars) over the period of next two years. The company will then employ the services of its leasing unit, Xchange Leasing, to lease out the cars to drivers who’re willing to join their platform, says a top-level executive.

Uber has been mulling over this expansion plan for quite sometime now. It has also pumped in a whopping Rs. 43 crore into the aforementioned leasing unit a couple months ago. Muruti Suzuki and Tata Motors are likely to gain the most as the company already has driver skilling, vehicle purchase and financing pacts with them.

Once procured, the fleet of purchased vehicles will be disbursed to potential driver partners by arranging finance and negotiating deals with automakers themselves. This investment will likely be the largest-ever by a single buyer in the country.

And how much would that be? Well, Uber has declined to comment on the deeds of the investment it is planning to make in this fleet expansion programme, so we would do a rough calculation and take Ola as an example.

Ola, in you’re unaware, has recently signed a similar passenger vehicle leasing partnership worth Rs. 2,600 crore with Mahindra & Mahindra. The two will offer a customized package, which includes a Mahindra car at lower prices, attractive financing, subsidized insurance premiums, and comprehensive maintenance packages. This move by the company is aimed at creating entrepreneurial opportunities for drivers and reach at least 40,000 drivers in the next two years.

So if go by the aforementioned numbers then the American giant is likely to invest close to Rs. 13,000 crore to acquire the cars needed to expand its driverbase. That is five-fold the amount of funds that Ola is prepared to spend on its driverbase expansion. Uber plans to one up Ola and sign up a million drivers in the next two years. It currently has over 400k driver partners on its platform.

In conversation with ET, Raj Beri, head of leasing at Uber India, says,

We aim to empower a million driver-partners by 2018 under our UberSHAAN initiative and expect that potentially one out of five new drivers would be on the platform through our leasing programme.

After its exit from China, Uber is now pushing full-force to take on the local rivals in the Indian and Southeast Asian markets. Uber is also not short of funds, and has recently added another investor to its already lustruous set of marquee investors. Kumpulan Wang Persaraan (Diperbadankan), Malaysia’s public-sector pension fund has made an undisclosed investment into its first foreign client in the form of the American ride-hailing giant.

Keep a close an eye as this is all a part of Uber’s plan that ultimately leads to world domination!!

A hands-on guy fascinated by new apps, technologies and enterprise products.

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