Tata, Uber aim for strategic alliance to drive digital business

The Tata Group has initiated discussions with Uber Technologies to forge a strategic partnership with an aim to bump up traffic volumes and engagement on Tata's digital platform, said people with knowledge of the matter. The collaboration could entail integrating Uber's services as an ‘anchor app’ within that ecosystem. Tata Neu, positioned as a ‘super app,’ has encountered challenges, including stagnation in user growth and low customer engagement, said people aware of the matter.

Uber Technologies CEO Dara Khosrowshahi met Tata Sons chairman N Chandrasekaran in Davos earlier this year and they’re expected to talk again in Mumbai during the former’s upcoming India trip to discuss the broad contours of a potential alliance, executives aware of the matter said. The exact terms of engagement are still being worked out and there’s no guarantee it will lead to anything concrete.

Tata Digital, which runs Tata Neu, denied that any talks are ongoing. Uber did not respond to ET's queries.


In recent times, Khosrowshahi has steered the cab aggregator into new areas such as grocery delivery and high-margin advertising as user numbers have ballooned to 150 million from 45 million seven years ago, when he took charge. Uber unveiled a $7 billion share buyback programme, its first, on Wednesday, days after reporting its first full year of operating profit, making it the latest Silicon Valley company to step up returns to shareholders.

Tata Motors had signed an agreement with Uber in February to supply 25,000 electric vehicles. This is the largest EV commitment yet between an automaker and a ridesharing platform in India. Tata Motors will make deliveries of the XPRES-T EVs to Uber fleet partners in a phased manner. The partnership will help the electrification of Uber services in Delhi NCR, Mumbai, Kolkata, Chennai, Hyderabad, Bengaluru and Ahmedabad. The strategic alliance may also include a longer-term supply commitment. Tata Motors commands a 70% share in the passenger EV market and is aiming for a predominantly electric fleet by 2030. The partnership aligns with Uber's zero-emission objectives and Tata Motors' vision for EV mobility in India.

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A Tata Motors spokesperson said, “Uber is one of our key customers for our EV fleet offering. We regularly engage with our fleet customers to explore opportunities for accelerating the adoption of green, emission and noise free mobility.”

Over 200 million people have downloaded the Uber app in India since its launch in 2013, as per App Annie, a data and analytics firm. In the next three years, based on demand projection, the aggregator has said it will need 150,000 to 200,000 new vehicles in the country in the next 3-5 years for expansion and replacing old vehicles.

The strategic partnership may also see equity participation, although this could not be independently verified.

Tata Neu aims to cater to 50% of an average customer's daily, monthly and annual needs, spanning groceries, medicines, fashion, food, travel and utility payments. However, it needs greater customer engagement to achieve its super-app goals.

“Tata Digital needs a big push and scale up to its consumer installs and membership. At the moment, the other brands really can’t get in those kind of numbers,” said an executive close to the development. “How the discussion progresses hinges on mutual benefits.”

Addressing previous user complaints about glitches, poor user experience and payment issues, Tata Digital has revised its strategy to enhance app performance and user satisfaction. Lower-than-anticipated user growth and concerns within the leadership had prompted the appointment of a new CEO to drive business expansion and overcome challenges.

The possible partnership with Uber, renowned for its mobility solutions, could help fulfill this objective by attracting daily users to Tata Neu. Tata Digital aims to broaden its product portfolio to meet diverse consumer demands, including offerings beyond the Tata Group's traditional scope.

Tata Sons has allocated over $2 billion to Tata Neu. Tata Digital pegs installs at 60 million and NeuPass members at 75 million.