Uber India's Losses Decline 35% in Fiscal Year 2022

Uber India Latest Business News

Uber India's ride-hailing business saw decent growth in FY22, with its collection from the vertical reaching Rs 388 crore. However, the company's revenue for providing support services to group companies decreased by 87.7% to Rs 8.72 crore during the same period. Uber India's operating income was mainly derived from its ride-hailing biz, which grew 29.5% to Rs 388.23 crore in FY22 from Rs 299.7 crore in FY21. The local entity also earned non-operating income and interest on current investments of Rs 163.6 crore, taking its total revenue to Rs 560 crore.

On the expense side, Uber India booked 51% of its expenditure as the cost of materials consumed. Employee advertising cum promotional expenses and benefits declined 63.6% and 44.1%, respectively, to Rs 44 crore and Rs 151 crore during FY22. On the other hand, legal cum professional fees spiked 71.7% to Rs 28.84 crore in FY22 from Rs 16.8 crore in FY21. Uber also incurred Rs 36.28 crore in rent and utility costs. As a result, Uber India's annual expenditure declined 13.4% to Rs 853 crore in FY22 compared to Rs 985 crore in FY21. With controlled expenses, the company cut down its losses by 35.3% to Rs 216 crore last year.

The numbers for Uber India are shockingly unimpressive for the year concluding 2021, as evidenced by its EBITDA margin and return on capital employed (ROCE), which declined to -44.77% and -16.95%, respectively. This sharp decrease could be attributed to lowered employee benefits and promotional expenses on a unit level, as it took, on average, Rs 2.15 to generate a single rupee in operating revenue. 

Despite the growth in FY22, Uber India has failed to deliver on its promise of making personal vehicle ownership redundant. Its driver 'partners' and users seem unhappy with the services, and without a drastic change in approach, the suspicion remains high that the end of the road is never too far away for Uber India. Ultimately, Uber India will have to make significant changes to its approach to remain viable in the long run.

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About Uber 

Uber is a global technology company and platform that has revolutionized how people move. Uber offers a more efficient, reliable, and affordable way to travel than using traditional methods of transportation. Uber provides the convenience of ordering transportation from anywhere using a smartphone app. With just a few taps, users can order a ride from a driver who can take them to their destination safely and reliably. To date, Uber has provided billions of rides to millions of people in countries across the world, providing jobs to drivers and an efficient transportation option to many communities. In addition, Uber offers many other services, such as food delivery and boat and bike rentals. Uber has transformed the industry and changed the way people travel forever.

About Entrackr

Entrackr is an online startup news platform focused on start-ups. It covers the latest news, trends, developments and profiles of start-ups and entrepreneurs in India and across the globe. The platform also offers consulting services and helps in connecting investors and startups. Entrackr's news section covers interactions between entrepreneurs, investors and other talking of the start-up industry. It also includes a list of upcoming events and conferences so readers can stay updated on the happenings of the industry. Entrackr is a great way for startups to stay relevant and up-to-date with happenings in the start-up and venture capital world.

Paytm Mall Records Rs282 Cr Revenue and Rs142 Cr Loss

Paytm Latest Startup News

Paytm Mall, the e-commerce platform of Paytm, has been trying to find a sustainable model for the past two years. The Paytm Mall’s revenue from operations grew to Rs 282 crore during the fiscal year ending March 2022 from Rs 277 crore in FY21, according to its annual financial statement with the Registrar of Companies (RoC). Sales of products contributed 49.6% of the company's total operating revenue.

Revenue from Paytm Mall grew 85.3% to Rs 139.9 cr. Commission collected from merchants and sellers for providing platform services accounted for 45% of the total collection during FY22, which declined 27% to Rs 126.9 crore from the preceding fiscal year's revenue of Rs 12.7 crore. The company also booked revenue of Rs 8.6 crore during FY22 as a marketing promotion fee for providing advertising services on its platform; this income surged 47.7% from Rs 6.5 crore in FY20. In FY22, the company also collected operating revenue of around Rs 3 crore and recovered claims from courier companies; Paytm Mall also recorded non-operating income of Rs 21.6 cr from liabilities written back & Rs 80.4 cr as interest income related to bank deposits, royalty accounting adjustments, and others which drove the total revenue to Rs 384 crore during FY22.

Interestingly, only 53% of revenue in FY22 came from India with the rest from other countries. The 47% revenue Paytm Mall's revenue came from offshore markets is even odder when one considers that it doesn't have an effective presence in any overseas markets. On the expense front, royalty fees paid in exchange for services received from One97 Communications Limited (Paytm) turned out to be the largest cost element, forming 23% of its total expenditure. For those who aren't familiar with it, Paytm Mall isn't a subsidiary of One97 Communications Limited, but has been licensed to use the Paytm brand, and run on the Paytm app; however, employees don't receive benefits and advertising/promotional expenses declined 29.7% and 59%.

It costs money to run a business, and the cost of connectivity and payment gateway charges decreased by 43% in FY22 from Rs 36.9 crore in FY21 to Rs 21.1 crore. Paytm Mall's expenditure decreased by 43% to Rs 526 crore in FY22, resulting in a loss of Rs 142 crore during that period. The company also booked an exceptional item of Rs 398 crore as an impairment of goodwill taking the losses to Rs 540 crore, as per annual statements filed with the MCA portal. This could be attributed to $398 worth of impairment of goodwill booked under non-cash adjustment.

Entrackr has excluded this expense while calculating overall losses and ratios; Its costs such as connectivity and payment gateway charges have decreased by 43% in FY22 to Rs 21.1 crore from Rs 36.9 crore in FY21. The company's expenditure for Paytm Mall also decreased by 43% to Rs 526 crore during FY22. As a result, the losses of the company decreased to Rs 142 crore in FY22. The company also booked an exceptional item of Rs 398 cr as an impairment of goodwill taking its overall losses to Rs 540 cr, as per the annual statements filed to the MCA portal. Entrackr has excluded this expense while calculating the overall losses and ratios so far; however, we will be running a separate analysis on that at a later date. The EBITDA margin and ROCE improved to -27.34% and -12.88% during FY22.

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In May, the e-commerce marketplace Paytm Mall pivoted from the traditional physical goods marketplace to join the government-backed Open Network for Digital Commerce (ONDC). Meanwhile, Paytm Mall’s early and key backers Alibaba and Ant Financial took an exit from the Bengaluru-based company. While no longer a subsidiary, deep legacy relationships with former parent One97 are nowhere close to unwinding soon; as evident in the numbers. For a truly sustainable future, it needs to look at every cost harder in that respect and build further on the new opportunities it is mining now.

For more latest startup news & information, stay tuned to Entrackr.

CCI Fines MakeMyTrip and OYO for Anti-Competitive Conduct

MakeMyTrip and OYO Startup News

The Competition Commission of India (CCI) has fined MakeMyTrip and Oyo for anti-competitive conduct in hotel room listings. The CCI has fined both companies 5% of their annual turnover for a period of 3 years; Oyo was fined Rs 168.88 cr, while Make My Trip was fined Rs 223.48 cr.

The decision comes after complaints from budget hotel chains that the companies’ vertical integration agreement was creating dominance in the online hotel booking market, and that MakeMyTrip was deep discounting and enforcing terms that prevented rooms from being cheaper on other platforms. 

In a statement, Oyo indicated that the platform would appeal the ruling, saying "OYO believes that our business practices and conduct comply with all applicable laws & will take all necessary steps to explain our position in the appropriate forums."

A MakeMyTrip spokesperson also said the company would explore an appeal, saying that the platform was compliant with Indian laws. The spokesperson went on to say that "The CCI’s order is appealable before the National Company Appellate Tribunal within 60 days. We’ll determine our future action as per of our legal counsels advice .” 

The Federation of Hotel & Restaurant Associations of India (FHRAI) has welcomed the order. In a statement, FHRAI president Pradeep Shetty said, "This is by far one of the biggest wins for the hospitality industry against the dominance of the aggregators." 

Shetty added, "Oyo especially is responsible for the systemic depredation of the budget segment hotel business and its market as a means to achieve a notional billion-dollar valuation. This is a serious concern for our country’s hospitality ecosystem.” 

In addition to paying penalties, “MMT Go is directed to modify the agreements with hotels/chain hotels, to remove/abandon the price and room availability parity obligations imposed by it on its chain hotel partners w.r.t. other OTAs,” the order said. This essentially means that MMT cannot force hotels chains it has partnered with to offer higher prices or identical on other platforms. 

Also Read: LeadSquared's Revenue Hits Rs 200 Cr in FY22, Losses Jump 5.4X

The commission also ordered that hotel listings be offered on a transparent basis on the platform. The order will be appealed by both firms, but they should consider a defense based on their shrinking market shares in the segment. Anecdotal evidence indicates a strong push by many of their 'partner' hotels chains to not accepting such bookings made on these platforms as far as possible.

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Winzo File a Claim Against Google for Not Authorising Non-Rummy Games on Play Store

Winzo Games Latest Startup News

Winzo, the producer of Poker and Rummy like games application said on Tuesday it was filing a complaint against Google in Delhi High Court that "Google is discriminating and is not authorising Non-Rummy games on the Play Store. Winzo says that Google is partial and it only permits Rummy and unrealistic sports games on the app store. 

Winzo also claims that Google, which is not against gambling and betting in India is doing discrimination against them by not allowing real money-making apps on the play store. Google has declared recently that it was doing a one-year pilot with the Rummy and Dream Sports app. 

Why is Winzo so upset with Google? & What was the Major Issue that Caused the Rift Between Winzo and Google? 

All this started in March of this year. Winzo sued Google in March because of the warning that Google Chrome used to show every time on the cell phones, whenever someone attempts to download the Winzo application that says "Document may be destructive". This was the common warning that used to display among most of the individuals who were about to download this real money-making app, Winzo. 

Recently, Winzo again filed a claim against Google on 20th September for not authorising Winzo games and fantasy games on Play Store. Winzo is one of the numerous industry players like MPL and Zupee who have declared Google's pilot policy with Rummy and fantasy games erratic, biased and prohibitive. Winzo and the other organisations declared this in front of the media in its most recent suit.

If You are Wondering What was the Reaction of Google on Winzo's claim? Here it is;

Google refused to remark: The organisation has never restricted any of the real cash gaming applications on the Play Store. Another hearing of this case was on 22nd September (Thursday).

In the court records collected by Entrackr, the lawyers from Google's side told that this claim was "waggish, meaning-less and reductant" quarrelling that Google Chrome and all the other browsers display a similar warning for all the APK files that are being downloaded from the platforms other than Play Store. The lawyers from Google's side said that the IT Rules 2021 permitted it to show that brief as a safety effort.

Google presented the reviews from Winzo's iOS application, which is also accessible on the Play Store, where various customers claims about being deceived by the real money gaming apps or incapable to clear out their money or withdrawals.

What does the Co-founder of Winzo Comment about the Situation with Entrackr? 

Saumya Singh Rathore, the co-founder of Winzo told Entracker that Google's narrow scope for this pilot strengthens monopolies organised by fantasy game companies such as Dream11 and harms the producers like Winzo that have many real cash game ideas in their applications.

Rathore also told Entracker that the warning shown by Google Chrome while downloading this real money gaming app was making 75 out of 100 customers, who initiate to downloading the app yet change their mind after seeing the warning. 

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Wrapping Up 

Winzo has filed a claim against Google for allegedly breaching antitrust law by not allowing developers to use non-rummy card games in their Play Store. The court's final decision is yet to come. The battle between Winzo and Google is still fresh and will pose to be an interesting one. Be connected with us at Entrackr for the latest startup news and also about this hot topic in the market.

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Mahindra Electric’s Op-Revenue Nears Rs 450 Cr in FY22, Losses Shrink 34%

Mahindra Electric Latest News

Mahindra Electric's revenues have grown rapidly in recent years on the back of the booming sales of electric vehicles in India. The company's revenues stood at Rs 450 crore in the financial year ended March 31, 2021, up from Rs. 204.41 crore in the previous financial year.

The company's losses have also shrunk significantly, from Rs 107 crore in FY2 to just Rs 70.5 crore in FY22. This is largely due to the growing sales of electric vehicles in India, which have helped offset the higher costs associated with manufacturing and marketing these vehicles.

Looking ahead, Mahindra Electric is well-positioned to capitalize on the growing demand for electric vehicles in India. With a range of new products in the pipeline and a strong distribution network, the company is poised for further growth in the coming years.

Mahindra Electric's operating revenue grew 2.17x to Rs 44.388 billion in FY 2022 from Rs. Electric vehicle sales were the main source of income. Accounting for 67% of operating profit, it increased by 2.8 times to Rs 296.8 crore in FY22 from Rs 106.39 crore in the previous fiscal year. Mahindra Electric's portfolio consists of 2 vehicles (eVerito and E20Plus) and 6 vehicles including e-pedicab and e-car (passenger and freight segments).

Product development and design fees were the other major source of revenue, increasing by 21.8% to Rs 83 Crore in FY2022. Sales of kits and spare parts earned Mahindra Electric Rs 63 crore in FY22.  Mahindra Electric witnessed material costs as the biggest cost center because of reasonable manufacturing rates. Material costs totaled Rs 256.5 cr in FY22, up 11.9% from Rs 231.2 cr in the preceding fiscal year (FY21). Material costs also constituted half of the overall costs in FY22, up from 50.1% in FY21. 

Mahindra Electric saw an increase in manufacturing costs for both capitalized and variable costs-- the increase in variable costs was likely a result of severe labor shortages which reduced the ability of development engineers and other manufacturing personnel to work.

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Mahindra Electric spends more on advertising, promotion and transportation than on research and development. The company spends Rs 517.7 crore ($74 million) on everything from advertising, promotion and transportation. All this presumably helps the electric car maker to increase its sales, at least when it isn't subject to import tariffs or other government-imposed restrictions. However, keeping costs stable means harmful cuts to R&D, research and development, which is why the company's operating losses increased from 35 percent in the previous year to 64 percent this year.

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