Hyderabad Chosen By Uber For Their Largest Facility Outside USA; Signs MoU Worth $50 Mn With Telangana Govt. Despite Legal Sanctions



Hyderabad has done it again; but this time, it’s more spectacular because despite legal sanctions from Central Govt., the State Government has allowed Uber to invest in Hyderabad.

In a Memorandum of Understanding (MoU) signed between Uber and Telangana Govt., it was declared that Uber will build their largest facility outside US in Hyderabad, and invest $50 million (Rs 317 crore) in the next 5 years.

After Google and Amazon, Uber becomes the 3rd global MNC to set up their largest facility outside US in Hyderabad. Microsoft already has their largest development center in Hyderabad since long.

Besides developing a state of the art facility, Uber has several other plans related with Hyderabad and Telangana:

  • This is part of $1 billion investment which Uber plans to do in India and China in the next 12 months
  • The facility will act as a response and service center for their drivers and customers, all over India
  • All salary processing and internal managerial works for all Uber employees (around 100 at the moment, which will increase to 500 by the time 2015 ends) would be conducted at this facility.
  • Uber will collaborate with The Telangana Academy for Skills and Knowledge (TASK) and train around 2000 people from weaker sections of the society, and enable them to become driver on their network
  • A self-financed model would be created, wherein drivers can own their vehicles and drive it too
  • Uber will work closely with Telangana Govt. and create a regulatory framework for taxi aggregators’ service in the state.
  • Uber will offer their expertise of analyzing big data to help the state and city (Hyderabad) become more efficient and more effective. Proposal of collaborating in creating smart cities are also in the pipeline.

But Legal Issues Still Persist..

The most fascinating part of this whole MoU is that, as per Central Government notification, Uber is banned in Hyderabad. Road Transport Authority (RTA) in Hyderabad hasn’t given authorization to Uber to offer their services in Hyderabad, after the unfortunate incident in December last year.

Even after the MoU was signed, the RTA was adamant that Uber doesn’t have the authority to run their cabs in Hyderabad. RTA is simply following the Central Government’s directives, meanwhile the MoU was signed between Uber and the State Govt.

B. Venkateswarlu, Joint Transport Commissioner of Hyderabad said, “We haven’t got instructions from GoI as of now. We will look into authorization after the orders reach us. However, if the State government permits operations we can support the same,”

Meanwhile State Govt. maintains that as long as Uber follows the rules and regulations as prescribed by Government of India, there can be no legal issues.

Jayesh Ranjan, IT Secretary, said, “The government of India had sent an advisory to all State governments, asking each to enter into an agreement on standards which the car aggregators are expected to follow. As per the MoU, if Uber follows the GoI guidelines they will be given authorization to ply in Hyderabad,”

Can we consider this investment of $50 million by Uber as a bait to lure the state govt. into giving them permission? Is it a direct conflict between Central and State Govt.? Is Telangana Govt. in a hurry to lap up all possible investments, before Bangalore and Chennai take notice?

Do share your opinion by commenting right here.

1 Comment
  1. Altaf Rahman says

    When they say its the largest facility outside US, may be they mean back end office related infrastructure with which they support the logistics around the world.
    It may not necessarily be USD.50 million worth of cabs put on Hyderabad roads.
    Therefore there may not be any issue between RTA Hyderabad and State Govt.
    This is precisely the kind of investments that are sought after. Has nothing to do with cabs. If India does not allow cabs, they may support whole South East ops, Asia Pacific ops.
    In fact it cuts their costs by shifting ops from US to India.
    Just my two paisa :)

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