Uber invests Rs43 cr in car leasing firm Xchange
15 June 2016
App-based taxi service Uber, in a bid to take on its biggest rival Ola, has invested $6.4 million (Rs43 crore) in Mumbai-based car leasing firm Xchange Leasing India Pvt Ltd between January and March this year.
The company received Rs10 crore in January and Rs32.99 crore in March from Uber International Services Holding BV and its subsidiary Mieten BV, as per documents filed with Registrar of Companies.
The company announced in March that it would invest $500 million to boost Indian operations by June.
Uber started with its leasing business globally in 2013. In India, it associated with Xchange leasing in December 2015. Both companies have Mohd Akbar Khan as common director, and it also operates with Uber in the US and South Africa.
At present, Uber drivers have to pay Rs30, 000 to Rs35,000 to be part of leasing programme and then monthly lease payments with an option to own the vehicle after three years.
Ola on the other hand, began with the leasing programme initially in September last year, thereby allowing its drivers to borrow taxis at cheaper interest rates. Ola further plans to invest Rs5,000 crore over leasing programme in the coming year.
Leasing cars help both Ola and Uber to retain drivers exclusively on their platform, as many drivers today are using 3-4 hailing services.
Ola has raised a total of about $1.2 billion so far, including $500 million in November from investors, including China's biggest taxi aggregator Didi Kuaidi that is building a global alliance against Uber. At the time, Ola was valued at $5 billion.
Last month, Toyota Motors invested an undisclosed sum in Uber. This strategic investment also allowed Uber drivers to lease their vehicles from Toyota and cover their payments through earnings generated as Uber drivers.
Both Ola and Uber get more than 70 per cent of their revenue from Bengaluru, Hyderabad, Chennai, Delhi National Capital Region and Kolkata. The companies are seen to be fighting fiercely to hold majority share of the $1.4 billion online car hiring market in India. Recently, Uber alleged that Ola employees and agents are making false bookings on its app and also filed a $7.5 million lawsuit against Ola.
Acting on the complaint, Delhi High Court has issued a notice to Ola cabs over Uber's plea alleging interference in business activities. The next hearing of the case is on 14 September.