Also Read: Adani seeks partnership with Uber to accelerate super app, electric cars
What’s Khosrowshahi’s India gameplan?
Dara Khosrowshahi, the CEO of Uber, the world’s biggest ride-hailing operator, joining hands with India’s third biggest business house in terms of market value, is expected to generate huge synergies. The Uber chief, who met Adani over breakfast two days ago, said they had an “absolutely terrific conversation”.
In India, both Uber and its bigger rival Ola, have struggled to achieve consistent profitability in a market which is growing fast but is extremely price-sensitive. During a conversation with Infosys co-founder Nandan Nilekani in Bengaluru last week, Khosrowshahi said that Indians are extremely demanding, but are not willing to pay for anything. “India is one of the toughest markets out there. If we can succeed here, we can succeed anywhere,” he said. Khosrowshahi said the Indian arm was now a “self-sustaining business” and was reinvesting profits into expansion across tier II & III markets and other fast-growing products. Uber may also introduce bus services in some areas. While rival Ola dabbles with multiple “shiny, new efforts and (an) IPO”, Uber will continue to build its ride-hailing business which has immense potential for growth, he told ET recently.
As Uber expands in India, which it expects to become its biggest market in a decade, it also aims to replace its existing fleet with electric vehicles across the globe, as it looks to transform itself into a zero-emission mobility platform before 2040. Joining hands with Adani will help it in that direction. Adani will buy electric cars, brand them and add them to Uber’s network. Tata Motors has already signed an agreement with Uber to supply 25,000 electric vehicles, the largest EV commitment yet between an automaker and a ridesharing platform in India. A partnership with Adani will also offer Uber a large consumer segment from Adani’s airport business. Ola, Uber’s rival in India, is also betting on EVs and is set for an IPO. It is already a market leader in electric two-wheelers and has launched electric bike taxi services in several cities.Why is Adani riding on Uber?Uber offers Adani multiple benefits. Primarily, the deal with Uber will help Adani’s renewable energy push. Adani is setting up a network of charging stations across India and will complete the loop by powering the electric vehicle fleet with green energy. Adani Total Gas Ltd is on target to install 75,000 electric vehicle (EV) charging stations by 2030. The Uber deal is part of Adani Group’s commitment to invest $100 billion in India’s green energy transition over the next 10 years and plans to scale up to 10GW of solar manufacturing capacity by 2027.
Also Read: Adani Group to invest $100 billion on shift to green energy over 10 years
Uber will push Adani’s plans to get into electric passenger vehicles. It already has a presence in electric commercial vehicles like buses, coaches and trucks. Though it is not into vehicle manufacturing, it has huge in-house requirements in its ports and airports businesses. Recently, Adani Enterprises has forayed into the electric mass mobility segment, submitting bids for the latest tender floated by state-owned Convergence Energy Services Limited (CESL) for 3,600 electric buses, ET had reported early this month.
Adani, along with consortium partner EKA Mobility, submitted the bid for the procurement, supply, operations, maintenance and development of allied electric and civil infrastructure for electric buses on a gross contracting basis under the Pradhan Mantri e-bus Sewa initiative. EKA Mobility (Pinnacle Industries) had received approval under the ₹25,000 crore production-linked incentive scheme announced by the Centre for the auto and auto component sector. A partnership with Uber to supply EVs will thus be a part of Adani’s already active EV play.
The collaboration with Uber will also help expand Adani One, the super app which offers a host of services such as flight bookings, holiday packages and airport services. Uber will be integrated into the super app for cab bookings.
For some time, Adani has had plans to invest in a fleet of passenger vehicles. ET had reported in 2022 that Adani planned to list its fleet of vehicles on Uber in the cities where it operates airports. Adani operates seven airports in Mumbai, Ahmedabad, Lucknow, Jaipur, Thiruvananthapuram, Guwahati and Mangalore and is building another one in Mumbai. Notably, the two companies had announced a partnership under which Adani Airports had dedicated pick-up zones for Uber at some of its airports.
Adani has been investing in companies to complement its airport business. ET reported a few days ago that Adani Airports is in advanced talks with Hong Kong-based Plaza Premium Group to enter into a joint venture to run its airport lounges across the country.
As per industry estimates, within the ride-hailing business, airport rides are the most profitable category. Adani could be looking at an upstream and downstream solution, Vinay Piparsania, founder and principal of mobility advisory and consultancy firm MillenStrat, had told ET in 2022. “An airport is a 24×7 operation with its peaks and drops and that’s something that makes it predictable. No one today is fully satisfying the end user’s requirements. So, anyone who can provide a service that is predictable, comfortable and safe,” he said.
“Adani is looking at both an upstream and a downstream solution — where it has a hold over the supply, and secondly is the end user because it can provide solutions that it can bundle together.” Piparsania had said. “With the right software solution, accounting for pickup time, drop-off locations, delay in flights, etc, it can be much more bespoke in its management.”
Integration of Uber with Adani One app, which Gautam Adsani wants to make “the Ferrari of the digital world”, is part of the Adani Group’s strategy to build ancillary offerings that support the airport business growth as well as build a consumer app that feeds on the huge number of passengers that pass through Adani’s airports. Nearly 20% of India’s aviation traffic goes through Adani
Adani launched the Adani One super app in 2022 to offer varied consumer services, including those from his own airport management business. Adani One connects passengers at Adani’s network of airports with other services offered by his group. It offers booking for flights and cabs, shopping for duty-free products, information about flight status, etc.
Bringing Uber services under Adani One super app will be a boost for Adani’s new consumer-facing business of digital services and retail where biggies Reliance Industries and the Tata Group are ahead of Adani. There were recent reports of Tata trying to partner with Uber for its super app Tata Neu.
(With inputs from TOI)
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