Uber reported a 54% increase in operating revenue in India for the last fiscal year to INR 2,666 crore, boosted by a strong pickup in its ride-hailing business and continued growth in the support and services functions.
For the year ended March 31, 2023, San Francisco-based Uber Inc’s India unit posted a wider loss of INR 311 crore compared with INR 197 crore in FY22, as employee expenses and advertising cost increased sharply.
The India ride-hailing revenue increased 75% from the year before to INR 678 crore in FY23, according to the company’s regulatory filings with the Registrar of Companies, sourced from business intelligence platform Tofler.
The business had slowed down during the Covid-19 lockdowns in 2020 and 2021, and has since recovered. In FY22, revenue from ride-hailing — four-wheelers, auto rickshaws and bike-taxis — grew 30%.
The financials of Uber India Systems Pvt Ltd (UISPL) also include the numbers for two other entities – Uber India Research and Development Pvt Ltd and Xchange Leasing India Pvt Ltd – that have been amalgamated into UISPL with effect April 1, 2022.
UISPL gets its revenue from multiple sources including service fees from users and drivers, through car advertisements and support services to its global parent. Xchange Leasing was engaged in the business of buying cars and leasing those out to its driver-partners.
Uber India’s revenue from support and services provided to Uber’s global entities in FY23 increased 52% to INR 1,977 crore, accounting for nearly three-fourths of the total.
For the full year ended December 31, 2022, Uber Inc — the global listed parent — had posted revenue of $32 billion, 83% up from a year ago. For the nine-month period ended September 30, 2023, it reported a 17% increase in revenue at $27 billion.
The US-based company’s net loss in the 12 months to December 31, 2022 had increased to over $9 billion from $496 million the year before. However, for the January-September 2023 period, the company turned in a profit of $458 million, compared with an almost $10 billion loss in the same period of 2022.
The widening of Uber India’s net loss came primarily from an increase in its biggest cost head — employee benefit expense — which grew 56% to INR 2,078 crore in FY23.
Advertising and promotional expenses more than doubled to INR 92 crore in FY23, from INR 45 crore in FY22. UISPL had spent INR 121 crore on advertising and promotions in FY21.
Ride-hailing biz
In the ride-hailing segment, Uber India competes with companies such as SoftBank-backed Ola, Swiggy-backed Rapido and a clutch of players that have emerged over the last 12-15 months.
On December 26, ET reported how some of the new platforms and services were attempting to challenge Uber and Ola by aiming to address the gaps in customer service and driver satisfaction left by the incumbents.
Uber’s biggest rival, Ola, has yet to report its financials for fiscal 2023. For FY22, Ola had said its revenue doubled to INR 1,970 crore, even as net loss widened 36%.
Bengaluru-based bike-taxi booking app Rapido, which launched its four-wheeler ride-hailing service in October, reported a threefold jump in its FY23 revenue to INR 497 crore.
Over the last few months, Uber has been working to increase its average ticket size in the ride-hailing segment in India by pushing some of its new products such as rentals, intercity rides and parcel deliveries that also provide the company with better unit economics. The company has also expanded into electric vehicle ride-hailing with the announcement of Uber Green in June 2023.
Meanwhile, Uber India has been facing scrutiny on several regulatory and tax fronts. The bike-taxi industry has come under backlash from some state governments for operating without the requisite licences. While Maharashtra has banned plying of two-wheeler taxis, the Delhi government has mandated phased conversion of bike-taxi fleets to electric vehicles.
In its regulatory filing, UISPL said it had disputed certain tax demands from the goods and services tax authorities aggregating to INR 1,018 crore up to March 31, 2022.
It said that if the rulings of the courts did not go in the company’s favour, the tax amount would be borne by Uber’s international entities as the tax pertained to services provided by UISPL in India on behalf of these entities.
