Exclusive: BluSmart may end cab-hailing trip, hit reverse gear

Cash-strapped electric ride-hailing startup BluSmart is planning to exit its core business and pivot to operating as a fleet partner of rival Uber, nearly six years after it first entered the mobility space in a similar capacity, said people briefed on developments.

“BluSmart’s shareholders have approved a plan as per which it will begin a transition of the fleet from its platform to Uber over the next few weeks. This will be facilitated in phases starting with 700-800 cars to begin with,” said one of the persons. “Once the transition is complete, BluSmart will wind up its own ride-hailing business.” The timeline for this process is still being finalised, the person said.

The pivot comes amid the company’s high cash burn — in excess of Rs 20 crore every month. Founders Anmol Singh Jaggi and Puneet Singh Jaggi, who own over 25% of the company, had been injecting large amounts of capital alongside the company’s external funding rounds earlier. BluSmart has an all-electric fleet. Uber launched its rival EV service Green in 2023 with an aim to have 25,000 electric cars on its platform deployed by fleet partners such as Everest Fleet, Lithium Urban Technologies and Moove.

However, with a debt crisis at solar engineering, procurement and construction firm Gensol Engineering, also promoted by the Jaggi brothers, cash is not easily available for investing in the ride-hailing company.


BluSmart had launched an effort to raise $50 million earlier this year but failed to secure any fresh capital from existing investors, said another person in the know. As a result of the cash crunch, BluSmart had delayed March salary payments. Sources said these dues have not yet been cleared.

“Uber works with a range of fleet operators and routinely engages with third parties to enhance mobility access for riders and earning opportunities for drivers,” an Uber spokesperson said. “We have no updates to share at this time.”

Anmol Jaggi did not comment on the development.

ET had reported on March 16 that Uber was in early-stage discussions with BluSmart for a potential acquisition.

Deal mechanics

Once the cars, either owned or leased by BluSmart, are listed on the Uber platform, the startup will get a portion of the fares earned by the vehicles. Uber will keep its commissions from these fares as it does with other drivers or fleet owners.

As part of the deal, BluSmart is also eyeing an investment from Uber but discussions remain uncertain in the backdrop of the startup’s deteriorating financial health, said the people cited.

“BluSmart is looking for a $15-20 million infusion but how this plays out depends on the fleet transition, and whether certain performance conditions are met,” said one of the people cited above.

Of the 8,000 cars that ply on BluSmart, more than 5,000 are owned by Gensol Engineering, while the remaining are either owned by the startup itself or are leased to it by third-party owners. A deal for the sale of almost 3,000 electric vehicles between Gensol Engineering and Chennai-based Refex Industries had been called off on March 28. Sources had said the transaction did not proceed given the condition of the cars that have been operating on BluSmart. Refex is one of the fleet operators for Uber.

BluSmart woes

ET had reported in March that, as a result of Gensol’s debt squeeze, BluSmart’s operations had been hit, with the number of daily rides on its platform falling to less than half the 25,000-30,000 it was clocking at its peak last year.

At least three key executives have quit recently — Anirudh Arun, CEO of BluSmart Fleet; Rishabh Sood, chief technology officer; and former Uber India executive Tushar Garg, who was the chief business officer at the EV ride-hailing firm.

BluSmart has also scaled down its international ambitions, closing operations in Dubai.

Since being founded in 2019, the BP Ventures-backed startup has raised over $150 million in equity and debt funding, according to Tracxn.

Alongside its other challenges, the ride-hailing industry in India has undergone a shift over the past year with WestBridge Capital-backed Rapido gaining market share quickly at the expense of Bhavish Aggarwal founded Ola.

ET had reported on April 1 that Rapido now has around 20% market share in four-wheeler ride-hailing according to number of rides. While Uber continues to command a 50% share, Ola is at around 30%.