In a statement on Wednesday, Uber CEO Travis Kalanick (pictured) announced his resignation, indicating that he was asked by the investors to do so. File photo
Employees at Uber India are concerned that they could lose market share to local rival Ola due to the uncertainty emerging over the exit of its founder and chief executive officer Travis Kalanick.
Kalanick, the founder and CEO of Uber, announced his resignation from the post amid pressure from a clutch of investors on Wednesday. His stepping down is a culmination of months of pent up demand for action from investors, employees and the public, as the firm went from being a beacon of everything that’s great about Silicon Valley to everything that’s wrong with it.
Uber, which has raised around $ 15 billion in equity and debt from global investors was last valued at $ 69 billion, making it the world’s most valued private company.
“Senior team members in India are worried as India is a key market and such problems might make us lose our edge and lose marketshare to the competition,” said an Uber employee who did not want to be named.
Amit Jain, the India and South Asia President, has been answering queries of his local employees who are concerned about the future of the company. The answers are still unconvincing, said the employee.
Jain, who has brought in soon after a rider was raped by an Uber driver in Delhi at the end of 2014, has navigated the India operations to become the second largest for Uber after it lost out China to Didi Chuxing. The crisis in the Valley could potentially put Jain in a global role as he has been able to reduce burn while still maintaining growth in India.
An Ola source said that the company could gain from the shakeup at Uber, but the company would not go aggressive to grab higher share in the market.
“Drivers of Uber will slowly start moving to other competitors. In India, of course they will come to us. The reason is there will be a management shakeup, people will start feeling insecure and this will go down to the drivers,” said a top manager at Ola on the condition of anonymity. “We should just focus on our business, don’t grab.”
Analysts say that with Kalanick gone, the days of Uber’s hyper growth are over, something that employees will struggle with in the short term. For India, the company’s second largest market globally, that could mean a slowdown in the rate of investment, something that’s already been witnessed in the first half of 2017.
“There’s nothing raising alarm bells yet, the market which was growing at 10-15 per cent month-on-month is now growing at 5 per cent. The drop in inventory that we see is because new drivers are not signing up. The ride hailing sector has had very high attrition all along, and it hasn’t really gone up now,” said Jaspal Singh, Partner at Valoriser Consultants.
Singh is of the opinion that Uber has a decentralised management approach and Kalanick’s departure won’t have any crippling effects on its business in India. However, until the company can bring in a new CEO put in place a new top management, decision making will be slow and that could give Ola an immediate advantage.
Uber’s market share of India’s ride hailing sector peaked at 40 per cent but is already down to 35 per cent and is expected to drop further to 30 per cent in the coming months. The drop is largely due to the company pulling the plug on driver incentives earlier than Ola. In the coming months, as drivers get wary of Uber’s management fumbles, more will leave in fear of uncertainty, says Singh.
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