Uber needs to acquire Ola so we can all move on

You probably heard of the latest investment story. A Chinese entity Didi Chuxing enters into an agreement with an American entity Uber. And it’s very normal to think to yourself – why should I care? As long as I have an app that brings me a taxi when I need one. At a price that’s far lesser than the kaali peeli taxis and there’s no reason to bother about taxi aggregators. Besides who takes ownership for customer complaints? We’ve heard all sorts of stories with Uber and Ola. As the finicky buyer says, ‘more options are always better.’ [caption id=“attachment_328998” align=“aligncenter” width=“640”] Image: Reuters[/caption] Now coming back to the Uber-Ola news. You’d need to pay close attention. Because it’s tricky. We all know of Uber and Ola. Both giants in their own right. One’s a global player. The other is huge in India. Then Ola introduced Ola Micro, which it claims is bigger than all of Uber in India. Then the two move court. Uber accused Ola of **unethical practices** . Clearly the relationship between the two isn’t just healthy competition. There’s clear case of bad blood. Competition is good for you and me. And must be upheld. The moment competition ends, it gives rise to monopolies. [caption id=“attachment_308920” align=“aligncenter” width=“640”] Representational image[/caption] Then in September 2015, we heard that Didi was an investor in Ola. Then, Apple invested $1 billion in Didi Chuxing. This was as recent as May 2016. A ‘funny’ tweet put out by Uber founder Travis Kalanick said his girlfriend owns Apple shares, which makes her a Didi investor. #domesticissues. That was 13 May, 2016. Now I’m just not sure what exactly was the time frame from a meeting with Didi to happen, to an announcement being made about the investment. From my understanding, it takes several months of discussions. Especially given the complexity. So did Travis Kalanick know of such a development in May when he tweeted that? There’s a great chance he did. https://twitter.com/travisk/status/731018873168764929 No wonder then that he’d visited India to get a feel of the market here. It appears Uber overstepped Ola. International experience comes in handy. That’s the reason headhunters prefer candidates with international work experience. I tried reaching out to Ola for a comment. Usually they’re very forthcoming. And all I received was a standard response. They aren’t commenting as of now. I hope to hear from them as soon as there’s a development. I’m not particularly sure if they’re entirely aware of what’s transpiring between Didi and Uber, or they’re trying to figure a way out. That still doesn’t explain the complex set of developments in the cab aggregator business. What are the options? What if Uber acquires Ola? That’s one way out. And it makes absolute sense. At first glance one may strike down the possibility as absurd. The powerful anti-competition body in India wouldn’t allow it. The anti-competition commission in the EU has always stood against potential business monopolies. Only, this isn’t the EU. And if one were to consider perception, it appears Uber could very well acquire Ola if it wanted to. Probably even buyout smaller aggregator and fleet services in India such as Meru and Tab Cabs if it wanted to. Uber isn’t running out of funding anytime soon. As typical of the startup world as it gets, investors continue to pump in more funding into a shaky startup they’re heavily invested into. That’s one way of reducing their cost of investment, and hopefully give it a fresh lease of life. Some of you may bank on Didi buying out Ola. To an extent that makes sense too. But that wouldn’t help Didi. It just acquired Uber China. Given the global scale of Uber, why would it want to make it difficult for Uber in one of the world’s most important market – India? If that option is ruled out, there’s only a third alternative. What if Ola acquires all the remaining Indian players and continues as one large Indian entity? Similar to Flipkart vs Amazon? There are pros and cons to this option as well. Ola would eventually need to grow aggressively. Given that it was looking for a new round of funding from Didi, this move couldn’t have come at a worse time. The financer you were banking on, just invested in your competitor. Even if Ola managed to secure rounds of funding from competing funds, chances are Didi would look at an exit since it would prefer backing its preferred product – Uber. Eventually, that just makes it difficult for Ola. The obvious preferred choice, whether we like it or not, is a consolidation between Uber and Ola, with Uber leading the final product, given the international reach of Uber. The fact is it isn’t a level playing field, and the rules are written by investors. Not everything is as clear as we desire. This road ahead has surge on.