Uber sells Indian food delivery arm to Zomato

In exchange for a near 10% stake in Zomato.

Uber sells Indian food delivery arm to Zomato In exchange for a near 10% stake in Zomato.

Uber agreed on Tuesday to sell its food delivery arm in India to Zomato.

As part of the deal to let Uber Eats India go, Uber will receive a near 10% stake in the local company, the companies said in a joint statement. UberEats' fleet of delivery drivers as well as basic information about its customers, including phone numbers and order history, will be passed onto Zomato, the companies added.

Since the announcement, UberEats in India has discontinued its operations and is directing restaurants, delivery partners, and users of the UberEats app to the Zomato platform. 

"We are proud to have pioneered restaurant discovery and to have created a leading food delivery business across more than 500 cities in India. This acquisition significantly strengthens our position in the category," said Deepinder Goyal, Zomato founder and CEO.

Uber will still have a presence in India through its ride-sharing services, with the company saying that the country remains "an exceptionally important market" for its ride-sharing business and would continue to receive investment. 

In 2015, Uber invested $1 billion across nine months into its Indian ride-sharing business with the target of providing 1 million rides a day. Since then, Uber has grown its Indian ride-sharing customer base to over 5 million weekly active users.

According to local reports, Uber Eats exited India as it struggled to sign up restaurants, diners, and delivery agents and had a "cash burn of $20 million per month".

Previously, Uber sold its businesses in China and Southeast Asia to local players Didi Chuxing and Grab, and in September, announced that it would be pulling its Uber Eats business out of South Korea, where the company faced stiff competition from local start-ups.

In the Asia-Pacific region, Uber Eats will now only have a presence in Australia, Japan, Hong Kong, New Zealand, and Taiwan.

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