Uber to Sell Food Delivery Business in India to Local Company

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Category: Business

Listening

Unlocking Word Meanings

Read the following words/expressions found in today’s article.

  1. online platform / ˈɒnˈlaɪn ˈplæt fɔrm / (n) – a service or space on the Internet where people can connect with each other
    Example:

    Shopping through online platforms is gaining popularity because of its convenience.


  2. merger / ˈmɜr dʒər / (n) – an act wherein two companies become one
    Example:

    The company entered into a merger with one of its competitors to gain a larger market.


  3. pan out / pæn aʊt / (phrasal) – to become successful or end well
    Example:

    He needed to create a new proposal after the first one did not pan out.


  4. neck and neck / nɛk ənd nɛk / (idiom) – describing two or more things that are strongly competing with one another
    Example:

    The two food businesses are neck and neck. There’s not much difference in the average number of orders they process each day.


  5. cease / sis / (v) – to cause something to stop
    Example:

    The business ceased its operations after a major scandal.


Article

Read the text below.

Indian food delivery company Zomato might soon take over the Indian branch of Uber Eats, Uber’s online food ordering and delivery platform.


Rivals Uber and Zomato have started merger talks in 2019. The two companies are still in the middle of negotiations, but Financial Express reports that the deal’s completion may happen soon. The sale is estimated to cost Zomato $400 million. Reports also say that after the sale, Uber will be allowed to invest up to $200 million in Zomato.


Early last year, Uber also reached out to Swiggy—another online food ordering and delivery platform in India—for a merger. However, the deal did not pan out as the two companies failed to agree on the financial and legal terms of the proposal.


According to sources, Uber’s decision to sell Uber Eats is part of its move to reduce its global spending. In 2018, Uber exited Southeast Asia, while in 2019, the company has reported losses.


Aside from its struggles with global spending, Uber Eats has been facing tough competition in India since it started in 2017. Uber Eats is behind Zomato and Swiggy—two companies that are neck and neck in India’s food delivery service industry. Zomato’s takeover in India is expected to help Uber achieve its goal to be profitable by 2021 and also give Zomato a slight edge over Swiggy.


Uber chief executive Dara Khosrowshahi [DAH-ra KAWZ-roh-shaw-hee] said that the company aims to make Uber Eats the Top 1 or 2 food ordering platform in every country that it enters. Otherwise, the company will cease operations in the country.


Viewpoint Discussion

Enjoy a discussion with your tutor.

Discussion A

• Do you think it is a good move for Uber Eats to sell its business to Zomato instead of trying to compete further? Why or why not?
• If you were the owner of Zomato, would you buy Uber Eats? Why or why not?

Discussion B

• Why do you think food ordering and delivery platforms are gaining popularity in recent years? Discuss.
• What can help food ordering and delivery platforms succeed over their competitors? Discuss.