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Uber to Invest $50 Million in Hyderabad

July 12, 2015

Uber to Invest $50 Million in Hyderabad

Uber, one of the leading names in the world of taxi-hailing services in India, has opted to put in 50 million US dollars, roughly equivalent to INR 317 crore. This money will be invested over a period of five years in a centre that will be established in the capital city of Telangana. The amount will be used for training the support staff that deals with the customers, and the drivers. Uber has also signed a MoU (memorandum of understanding) with the Telangana Government. The organisation is also planning to hire approximately 500 people from the city at the said centre, which is expected to provide a major boost to the state’s economy in the end.

Collaboration with Telangana Government

Uber is also expected to associate with the state government – its customer support team is already based in Hyderabad – and work with the Telangana Academy for Skills and Knowledge. As part of the collaboration, it will select and then train at least 2000 drivers by 2016-end. These drivers will be consequently working for Uber. For a fledgling state looking to make a greater mark for itself this will be a major help indeed.

Uber’s Plans for India

During April, Amit Jain was hired by Uber. Amit Jain had previously served at Rent.com, a firm based in the US, in the position of a high-level executive. India happens to be the biggest market that Uber has outside the US and perhaps this signing can be interpreted as a sign that the organisation is looking to increase its presence in the country. At present, its biggest competitors in India are Meru and Ola. It has also been increasing its footprints in China in a rather proactive manner. Evidently enough, the company is looking on emerging markets around the world to increase its business and grow properly. Right now, the company is active in 18 cities across India including its recently started operations at the following locations:

• Bhubaneswar
• Nagpur
• Coimbatore
• Surat
• Indore
• Vishakhapatnam
• Mysore

Question of Regulatory Framework and Clashes with Authority

However, the ride is not expected to be an absolutely smooth one. Regulatory issues are one of the major problems facing India at present and Hyderabad is no exception. As of now, Uber does not have the permission to operate in Telangana. B Venkateswarlu, the Joint Commissioner of the transport department of Telangana, has also stated that the organisation does not fit the state’s regulatory systems – this is why the state government has even asked the common people to never use services such as Uber in an advisory.

Uber has stated that it is working with state authorities so that a new framework could be created for companies such as itself. This is supposed to be done by August. Previously, the company based in San Francisco, has said that it will always cooperate with the national and state governments in India so that a long-term solution to the administrative roadblocks could be found out.

The organisation has had its fair share of issues with the authority. In 2014, Uber’s services in Delhi were banned after a lady accused a driver of raping her. The case is presently sub-judice and the driver has pled innocence. However, in spite of the ban, Uber is still operating in Delhi. As of now, transport aggregators such as Uber and Ola are operating in the capital region without permission. Recently, they had been instructed to apply for licenses that would let them work as radio-dispatched taxis. However, their applications were rejected by authorities.

Gagan Bhatia, who leads Uber’s Delhi operations, has stated that the company would like a chance to engage in positive interaction with the state government. Uber’s Hyderabad operations started during January 2014. It started its India operations in Bengaluru during October 2013. Hyderabad is the only city in India where one can pay an Uber cab by cash. Uber also has an auto-rickshaw service in Delhi where cash is the only mode of payment.

Why is This Important for Telangana Economy?

The investment being done by Uber in Hyderabad is just an initial process. Once this centre gets off the ground, Uber will be increasing the jobs available in India by a significant extent. As has been said already, hundreds of people are already working for Uber in Hyderabad. This centre is essentially a help desk and once it is properly functional India will have the second largest pool of employees at Uber’s disposal after the US. Siddharth Shanker, who is heading the operations of Uber in Hyderabad, has praised the association. He has said that it is a very good example of what can be achieved in case both private and public sector come together to help the common people.

Hyderabad is already a technology hub. However, for the long-term well-being of Telangana it is important that the surrounding locations grow as well. That can only happen when there is industrial development and one of the major prerequisites of such progress is proper transportation. If Uber is able to iron out its differences with the state government and properly function in the city then it would be able to run in the neighbouring areas as well. They will provide an extra option for one and all, especially the professionals who are working over there. One of the major reasons as to why cities such as Bengaluru, Delhi, and Mumbai are doing well is because of the well-developed systems of transaction that help everyone. With the introduction and proliferation of Uber and similar services, Hyderabad – and Telangana by extension – will take a major step in that direction.

There is also the matter of greater employment, especially for the non-skilled workforce, which is generally the most neglected species in any third world country. While it is true that the drivers are employed on contractual basis, it is also true that the drivers could do with the security of a monthly payment and work on a regular basis.

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I am from Kolkata. Like any other Bengali I love my fish, eggs and bhaat and sweets but I also feel proud to be a part of the biggest melting pot of the world - India. It is true that I need to go a long way before I finally call it a day but I have come some way and am sure will travel further. Cheers :)

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