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Uber likely to buy Meru Cabs at a valuation of $400 mn

The radio taxi market in India has been driving in the fast lane for the past few years, but it seems the time is now ripe for some consolidation.

US-based ride-sharing service Uber is said to be looking to acquire a stake in Meru Cabs, one of the earliest and largest fleet taxi operators in India. The news comes just a few days after another radio taxi operator, Taxi For Sure, was acquired by Ola Cabs.

The radio taxi market in India has been driving in the fast lane for the past few years, but it seems the time is now ripe for some consolidation.

US-based ride-sharing service Uber is said to be looking to acquire a stake in Meru Cabs, one of the earliest and largest fleet taxi operators in India. The news comes just a few days after another radio taxi operator, Taxi For Sure, was acquired by Ola Cabs.

According to an Economic Times report, Meru is said to be expecting a valuation of $400 million for the deal. It quotes unnamed sources as saying that Uber is looking at a majority stake in the company.

Meru’s current owner, India Value Fund Advisors (IVFA) has around 80% stake in the cab service and may want to continue holding a minority stake if the deal comes through.
IVFA is said to be looking out for opportunities to monetise its holding in Meru and was possibly considering an IPO as well.

Uber has been facing trouble with its India operations ever since one of its cab drivers was arrested for allegedly raping a woman in Delhi last December. Soon after the incident, the Delhi government cracked the whip on the unbridled growth of taxi services and asked operators to comply with more stringent checks and regulations to continue to operate in the city.

Uber has been facing trouble with its India operations ever since one of its cab drivers was arrested for allegedly raping a woman in Delhi last December. Soon after the incident, the Delhi government cracked the whip on the unbridled growth of taxi services and asked operators to comply with more stringent checks and regulations to continue to operate in the city.

While Uber is said to have filed revised documents of how it operates in Delhi (which reportedly include tighter security control and opting for a not-for-profit model), the transport department rejected its license request – as also that of Ola Cabs and Taxi For Sure.

The matter is pending further appeals and resolution, though there have been reports that some cabs are still plying in the city in contravention of government orders.

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