SoftBank is planning to invest in Uber in a bid to become the market leader in the ride-sharing space. But the Japanese investor said that it will own much less stake in the US-based company than its rival Ola to cool down the competitive heat between the two companies, Economic Times reported.
"We own more than 30 percent in Ola and we would own much less stake in Uber, but we are with Ola since 2014 and it does send conflicting signals to the trenches... It's not easy and not always about economics," said Rajeev Misra, SoftBank Vision Fund's Chief Executive Officer.
Misra, also said that if the transaction closes it will lead to short-term conflict but yield long-term benefit as it will create a worldwide empire in the ride-hailing space.
Still, if the deal fructifies, it will shake Ola's confidence and might trigger a more intense rivalry between the two ride-sharing companies.
Uber is already coming up with aggressive strategies to fight competition from Ola. The US-based company recently announced a free of cost insurance cover against death and injury for its drivers, commencing September 1.
This move will prevent Uber drivers from switching over to rivals as well as encourage drivers from other companies to join them.
Both companies are engaged in price wars and currently lose crores of rupees every month on investing in driver incentives and discounts, making profitability a tough goal.
