Reports: Uber explored the sale of its Indian ride-hailing arm

According to sources familiar with the situation, Uber Technologies Inc. looked at possibilities for its Indian ride-hailing service, including a sale, but discussions were put on hold as tech startup values plummeted.

After seeing its limited prospects for profitable development in the nation, the US corporation started considering alternatives and contacted many interested parties, according to the persons, who asked not to be identified since the material is private. Before a worldwide equity market collapse derailed preparations, it considered a stock swap with local businesses or possibly a withdrawal, the sources said. According to the sources, an equity arrangement was preferred in the first discussions since it would allow Uber to maintain a presence in India.

In a quickly expanding but price-sensitive sector where margins were being squeezed by regular driver attrition, Uber and its local rival Ola have been struggling to turn a profit. Similar agreements Uber made with Didi Global Inc. in China and Grab Holdings Ltd. in Southeast Asia, where it surrendered the markets but maintained an ownership investment in the dominant local player to harness future development, might have been replicated by selling to a local operator. The actions put a stop to pricey territorial conflicts fought with monetary subsidies and driving incentives.

Uber denied that it had thought about leaving India. "The story by Bloomberg is absolutely untrue. In a statement sent via email, company spokeswoman Ruchica Tomar said, "We have never even considered leaving India. Uber is still dedicated to India and is still "aggressively" hiring.

In order to attain its objective of being consistently profitable, Uber, whose shares have fluctuated drastically since its 2019 IPO, has split off cash-losing subsidiaries. It provided a good earnings projection in May, indicating the firm intended to take advantage of the strong demand for rides without sacrificing profitability by concentrating on product upgrades rather than incentives to address a driver shortage.