Fresh investment to help Uber boost India ridership to 1 million daily
Tata, a private equity fund that's part of the India-based conglomerate, has dropped significant cash into Uber to fund its expansion, though the companies didn't say how much it paid.
Car-hailing service Uber has secured investment funding from an India conglomerate as it looks to expand its ridership in the growing country.
Tata, the India-based conglomerate that operates across several industries, including technology, has invested in Uber, the companies announced on Wednesday. Though the sum was not disclosed, it came from a private equity fund operated by the Indian company named Tata Opportunities Fund, according to Reuters, which spoke with Uber about the investment.
The investment round, which Reuters' sources say could have reached as high as $100 million, will help Uber inch its way toward 1 million rides per day in India. The company previously set that goal to be met within the next nine months, though it only tallies approximately 200,000 rides per day right now. The 1-million-rides mark is an important milestone: it's about the same number that its India-based competitor, Ola, is expected to hit sometime this month.
Uber has previously said that India is critical to its growth. The company, which operates in 59 countries around the world, including 18 cities in India at the end of July, said in July that it would invest $1 billion over nine months to expand its footprint in the country. Uber said the cash would be used to fund its growth, as well as provide more services to the country.
Still, questions remain over how willing some cities may be to welcome Uber, and whether the company will need to jump through regulatory hurdles to realize its vision.
As Uber has grown, it's increasingly faced criticism and controversy in several countries around the world. In fact, the company's plan for rapid expansion in India could be met with challenges from Indian regulators who have proved difficult for Uber to work with.
New Delhi, India's capital city, has been an issue for Uber since last year when one of its drivers was accused of sexually assaulting a rider. Soon after, the service was banned by local regulators, citing inappropriate licensing. In January, despite its ban, Uber went back on the roads in New Delhi, saying that it was applying for a radio taxi license. In June, New Delhi authorities rejected the application and started impounding Uber cars.
In July, a court in New Delhi lifted that ban, saying Uber should be allowed to operate in the city if provided a license by regulators. The company's victory in the New Delhi court came after Uber petitioned the court, saying that its license denial was inappropriate. The company pointed to the same regulators approving the licensure Ola for its defense. The courts agreed with Uber that it was being treated unfairly and the company will now have an opportunity to resubmit a license application. Meanwhile, Uber is allowed to operate in the city.
In addition to its funding announcement on Wednesday, Uber has nabbed nearly $6 billion in venture funding over the past five years. Uber in July raised around $1 billion in a new funding round, according to a report in July in The Wall Street Journal (subscription required). Uber is valued at around $51 billion, according to the Journal's sources, making it the most valuable venture-backed company in the world.
Neither Uber nor Tata immediately responded to a request for comment.