Even as talks of a merger between homegrown ride-sharing company Ola and US firm Uber’s India unit are doing the rounds, experts watching the mobility space feel that the move will create monopoly in the market, which at present has only two major players.
Experts also feel that the deal, which is being facilitated by Japanese Internet giant Softbank, a major investor in both these companies, would face difficulty as the final approval has to come from the Competition Commission of India (CCI).
Harish HV, an e-commerce expert and former partner at Grant Thornton, said, “Such a deal will tend to create a monopoly in the market and customers, drivers will be at the receiving end. This is not at all good for the economy.”
While a few industry players are citing the Chinese example, where Uber was forced to quit the market following acquisition by local player Didi, others feel that Softbank will face major challenges to carry out a similar deal in the Indian market.
Arvind Singhal, founder of consultancy firm Technopak, said, “The deal, if at all happens, would lead to a situation where customers would be at a loss. Ola will dictate the prices. Right now there is no other alternative in the market.”
Sanjay Mehta, a serial angel investor, was of the view that this could be just a rumour by the company (Ola) to create disruption. “I am little skeptical about this,” he said. Mehta said such a deal would ultimately not prove to be good for Ola as people would go back to previous modes of transport such as taxis, auto-rickshaws and buses.
Ola has a valuation of $5 billion in India and Uber is valued at about $4 billion, according to sources.