Uber sells meal delivery service in India to competitor

UberEats has competed in India to keep up with competitor Zomato, one of the largest online food providers.

Ride-share giant Uber has sold India's meal delivery business to Zomato, one of its local competitors, as it boosts efforts to make a profit.

India is one of Uber's biggest markets for rides, but the UberEats meal delivery service has struggled to keep up with the two biggest online food suppliers Zomato and Swiggy.

In return for the network of restaurants, delivery guides and customers that UberEats has developed in India since 2017, Uber will receive 9.99 per cent of its capital Zomato, according to a press release issued Monday night.

The statement did not specify the value of the Indian startup.

UberEats users will be transferred to Zomato from Tuesday.

"India remains an extremely important market for Uber and we will continue to invest in the development of the local Rides business, which is already the clear leader in the segment," Uber CEO Dara Khosrowshahi said in a press release.

Uber, whose share price has fallen since its public offering in May, is due to release its annual results on February 6.

The group, which has promised investor profitability by the end of 2021, has already cut costs and laid off more than 1,000 employees in 2019.

The Uber Eats service is growing rapidly but faces intense competition in many countries.

Zomato's chief executive, Deepinder Goyal, said in a statement that "this acquisition significantly strengthens our position in this category".

The app, which offers restaurant reviews and tasting offers in addition to meal deliveries, boasts more than 70 million users a month.

Uber is returning to India, Africa and the Middle East as losses increase.