Uber in Talks to Sell Its Food-Delivery Business in India

Uber is in advanced discussions to sell its food-delivery business in India, according to two people with knowledge of the plans, as the company moves to stem its losses.

The ride-hailing company is nearing a deal to sell its Uber Eats service in India to Zomato, an Indian food-delivery service, said the people, who spoke on condition of anonymity because they were not authorized to do so publicly. The sale could be announced as early as this week, they said.

A spokesman for Uber declined to comment. The talks were earlier reported by TechCrunch, which said a deal would value the India business of Uber Eats at $400 million.

Dara Khosrowshahi, Uber’s chief executive, has been trying to pare back money-losing businesses to prove to investors that the company can turn a profit. Investors have agitated both in public and behind the scenes for Uber to clean up its balance sheet since it went public earlier this year.

Uber’s initial public offering in May was a disappointment, with the company’s shares immediately plunging as investors questioned how much money the ride-hailing service loses. That event marked a turn in sentiment around high-profile-but-unprofitable tech start-ups, many of which had burned cash for years in the pursuit of growth. WeWork, another highly valued start-up, later shelved its plans for an I.P.O. as private investors cut the company’s valuation to a fraction of its former worth.

Investors have recently homed in on several issues at Uber, according to two people briefed on the conversations. Those include continued regulatory challenges around the world — most recently, transportation authorities said they would not extend Uber’s taxi license in London, one of its biggest markets — and ballooning expenditures.

Some investors have privately grumbled that Uber also paid too much for Careem, a Dubai-based ride-hailing and delivery company that Uber announced this spring it would acquire for $3.1 billion.

According to two people familiar with the matter, investors have also privately complained to Mr. Khosrowshahi about the expense of its Advanced Technologies Group, which develops self-driving vehicles. No decisions have been made about the unit, these people said, which has more than 1,000 full-time employees.

While Uber Eats has been a bright spot for revenue growth, the company has offered subsidies and free promotional offerings to gain new users, which has been expensive. In a conference call with investors last month, Mr. Khosrowshahi said his plan for Uber Eats was to take first or second place in every city it operates.

“If we can’t make it to that level, we’ll look to dispose or we’ll get out of the market,” he said at the time.

In India particularly, Uber Eats has struggled to sign up restaurants, diners and delivery agents in a brutally competitive market where Zomato and other delivery start-ups like Swiggy are well established. Uber has had to offer heavy incentives to lure customers there.

In September, Uber also announced that it was pulling its Eats business out of South Korea, where the company faced stiff competition from local start-ups.

Mr. Khosrowshahi has previously retreated in ride-hailing in Southeast Asia, where the company faces difficulties competing. In 2017, under then-chief executive Travis Kalanick, Uber pulled out of China, where the company was burning billions of dollars. That same year, Uber largely withdrew from Russia.

Lack of access to sufficient food may be damaging Indian children's ability to learn

There has been an impressive expansion in school enrolment in India since the early 2000s. Despite this, India is in the midst of a “learning crisis,” with improvements in learning, lagging behind increases in enrolment.

Worldwide, India also has one of the highest rates of child undernutrition and household food insecurity—that is, inadequate or inconsistent access to enough safe and nutritious food to sustain a healthy life. Both of these issues have negative implications for the long-term health, well-being and productivity of young people, as well as for the economy more broadly.

In our recent study, we used survey data from the Young Lives study of childhood poverty to examine whether there is a link between food insecurity and learning for Indian adolescents.

There are good theoretical reasons why learning and food insecurity may be linked. When households experience food insecurity, they may have to make difficult decisions in order to meet the family’s nutritional needs.

For instance, households that need money for food might reduce spending on school fees and materials. Children might miss school, have less time available to study, or even drop out altogether so that they can contribute to the household economy.

Food insecurity can also cause children to experience hunger, undernutrition, and micronutrient deficiencies. This can lead children to have problems with concentration and memory. It can even impair their cognitive development. Children who experience food insecurity might also feel irritability and shame. This could impact negatively on their interactions with their parents, teachers and peers.

In the Young Lives data, 47% of 12-year-olds had experienced household food insecurity at some stage during the observation period. And even 18% of the wealthiest families had experienced food insecurity; food insecurity is not exclusively a matter of poverty.

Associations with learning

The study followed the same children over time, beginning in 2002. It tracked both food insecurity and children’s learning outcomes in four domains: reading, English, maths, and local language vocabulary.

In order to test for a link between food insecurity and learning, we applied statistical modelling. We used information on whether households had experienced food insecurity when the children were aged five and eight, and when they entered adolescence at age 12.

We found that food insecurity was negatively linked to learning outcomes in all four domains. This was true even after we accounted for other important factors.

For example, it could be that poverty affects both food insecurity and learning—and so any link between these outcomes is actually the result of poverty. We accounted for this and other possible explanations in our robust models, and still consistently found a negative association between food insecurity and learning across domains.

We also considered the timing and persistence of food insecurity. Do early life experiences affect later learning? Or can adolescents recover from earlier food insecurity? Are there differences if adolescents experience shorter versus longer periods of food insecurity?

We found that both timing and persistence do matter, but they have different effects in different learning domains. For vocabulary and reading, early and persistent food insecurity were very detrimental for learning. English and maths were more complex.

For English, early food insecurity didn’t matter as much, but later and persistent food insecurity were linked to poorer learning outcomes. This may reflect that, at the time of the study, English language learning happened later in the curriculum.

For maths, food insecurity at any time was strongly and negatively associated with learning. This may reflect the fact that maths learning at one level is built directly on learning at a previous level. In other words, a child who does not learn basic addition due to food insecurity will struggle with more complex maths. In contrast, for subjects such as reading, once foundational skills are established, some catch-up for missed material may be possible in the short term.

Feeding the future

Our work demonstrates the lasting effects of early life experiences. Addressing food insecurity may be an important part of resolving India’s learning crisis.

It may also contribute to achieving some of the UN Sustainable Development Goals. Goal #2 aims to end hunger and achieve food security. Our findings suggest that meeting this goal may have ripple effects by reducing inequalities (goal #10) and ensuring inclusive, quality education for all (goal #4).

As we have argued elsewhere, early intervention to prevent food insecurity is important to ensure that children are not disadvantaged while learning foundational skills. Scaling up early childhood feeding programs may be useful for targeting early food insecurity.

Offering free remedial learning classes for children who experience food insecurity may also enable them to catch up with peers. Finally, where social protection is inadequate to prevent children from working, providing safe, well-paid employment opportunities over school breaks may help children to work without missing learning opportunities.