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Zomato acquires Uber Eats business in India to consolidate position
Jan. 22, 2020

Zomato, the online food delivery and restaurant aggregator platform, on Wednesday announced that it has acquired Uber Eats’ business in India in an all-stock deal that will see the ride hailing company's food delivery business being directed to Zomato starting today.

In a blogpost on Wednesday, Zomato said the deal gives Uber a 9.99% ownership in Zomato. Uber Eats in India will discontinue operations and direct restaurants, delivery partners, and users of the Uber Eats apps to the Zomato platform, effective today.

The move is aimed at cutting losses at the ride hailing company’s food delivery business in India that has been a drag on the company’s earnings.

"This acquisition significantly strengthens our position in the category," Deepinder Goyal, founder and CEO, Zomato, said in the blogpost. With Uber Eats, Zomato will now collectively have a 55% share of the food delivery market and compete largely with homegrown Swiggy. Zomato delivers to over 550 cities in India.

Delivery partners, who were earlier associated with Uber Eats India, will on-board Zomato’s fleet, Goyal of Zomato said.

Close to 245 Uber Eats employees will be affected by this deal. These employees will not be absorbed by Zomato as part of the transaction. Uber is trying to find ways to absorb them within its business here, said a source close to the development.

The deal had been in the works for months, with widespread speculation over Uber’s decision to completely exit food delivery business in India as a response to mounting pressures on the ride-hailing company to curb losses especially after it went public in 2018. The move, said a source, is in line with Uber’s push to either be a dominant player in markets it operates or to exit the business.