Upstarts and new business models are barging their way into the cosy Uber-Ola duopoly in the urban mobility space in the country. In the process, this would mean better options, and perhaps even better economics, for the ordinary commuter.
Nearly a decade since US tech major Uber and Bengaluru unicorn Ola transformed the way commuters travelled in Indian cities and sewed up the app-based cab hailing sector (there was a third operator TaxiForSure which was acquired and then shut down by Ola in the mid-2010s), there are now new rumblings of competition, new models as well as new players.
Rapido, the market leader in the two-wheeler ride-hailing space, made the biggest noise this week with its announcement that it will now enter the cab-hailing space as well. ‘A strategic move to meet the diverse commuting needs,’ according to the Bengaluru-based company which currently holds 60 per cent of the market when it comes to two-wheeler ride hailing.
But, of course, the big pie is the cab-hailing space, and Rapido intends to get into it with a bang – one lakh cabs to start with, and a business model different from the plain vanilla commission system followed by Uber and Ola with its drivers.
“We are incredibly excited to introduce Rapido Cabs pan India following the immense success of our bike taxi and auto services across the country,” said Pavan Guntupallim, co-founder, Rapido. “Our innovative SaaS-based platform revolutionises the conventional commission system for drivers, tackling the persistent challenge of commission sharing with aggregators.”
Rapido is just one prong of the multi-pronged battle that entrenched players Uber and Ola will face in the coming months – the dip in ride hailing that both the companies saw since the pandemic is now just a bad memory, as customers are back on the streets and in offices, and travelling and commuting almost with a vengeance.
However, ride hailing is just one of the areas, as another model getting increasingly popular being that of hiring a driver for specific rides, with players like DriveU and Park+. DriveU is already looking at a revenue of around 100 crore this year.
“There has been significant interest in our space for various reasons, including (it being) an untapped sector in personal mobility, catering to more affluent car owners with higher disposable incomes and the overall rise in car ownership,” said Ashok Shastry, co-founder & CEO of DriveU. “We have observed a shift in mobility behaviour among car owners who, upon discovering DriveU opt for our services instead of traditional taxis,” he added.
Then there is BluSmart. The four-year-old company grew so much by word-of-mouth with its all-electric car fleet, trained drivers and promise of no surge charges and no cancellation that it is now looking at further rounds of fund raising and expanding to more cities (present operation includes Delhi NCR and Bengaluru), and a fleet of 8,000 electric cars before this financial year is out. “We want to eventually give tough competition to Uber and Ola,” BluSmart CEO Anmol Singh Jaggi was recently quoted in an interview.
This, as well as rumours that global rivals like Grab, the biggest ride hailing app in South East Asia, as well as Lyft, which is popular in US and Canada (there is a namesake ride hailing company in Kolkata, too) may enter the national market has forced Uber at least to wake up and look for the nearest charging station. Perhaps in a realisation of how BluSmart was being chosen by environment-conscious urban Indians, the company launched its own fleet of electric cars, billed UberGreen, starting with Mumbai and Bengaluru over the past few weeks. “We have an unwavering commitment to sustainability,” said Uber India president Prabhjeet Singh.
The biggest challenge for Uber and Ola presently are not the new startups or business models like driver-on-rent, but their own business model which works on connecting third party drivers on commission. More than once this has led to stand-offs between the corporate suits and their blue-collared ‘partners’, leading to strikes in which even local governments had had to intervene. Drivers cancelling Uber and Ola rides are such common feature that many believe that the rise in popularity of the likes of BluSmart and DriveU were primarily due to this irritant.
Shastry says as much when he told THE WEEK, “Customer behaviour is changing. Aggregators (like Uber and Ola) are facing challenges (because) booking a cab is often seen as a stressful experience, leading to anxiety for many individuals (leading to them) increasingly choosing an alternative.”