Ride hailing in the days before the pandemic, especially in cabs, was ruled by Ola and Uber, but as the economy opened up, a bunch of companies feel the sector is ripe for disruption. This is as per a report by the Economic Times.
India’s two dominant ride hailing platforms – Ola and Uber – are facing several smaller upstarts, category-specific business models as well as traditional players looking to break their duopoly.
As urban mobility picks up after a two-year jolt from the Covid-19 pandemic,
Rapido in the auto segment, BluSmart with its electric car fleet in Delhi-NCR, blockchain-based mobility startup Drife as well as new and older firms operating specifically in the lucrative airport and inter-city services space are going all out to corner market share from the leaders.
Ride hailing in the days before the pandemic, especially in cabs, was ruled by Ola and Uber, but as the economy opened up, a bunch of companies feel the sector is ripe for disruption.
BluSmart, a Bengaluru-based all-electric cab company, is close to raising $250 million from investors including BP’s venture capital division, according to people in the know. Cofounder Tushar Garg has said that it has 1,800 cabs running in Delhi-NCR and is adding 500-700 cabs every month.
Drife said on instant messaging Telegram that it had deployed about 10,000 cabs in Bengaluru as part of a pilot. The platform allows users to determine their own fares and drivers to receive payouts daily.
According to Tanveer Pasha, president of Ola-Uber cab drivers’ association, there are about 45,000 Ola and Uber drivers in the city, down from over 100,000 pre-pandemic.
All these players want to disrupt Ola and Uber at a time when both companies are seeing more ride volumes than before.
According to Vumonic, a data capture platform, the total number of rides on Ola and Uber in April was 1.4 times the number of rides in January 2020.
“The market is large enough for multiple players and having leading products across two, three and four-wheeler categories on our platform across 100-plus cities, we believe competition only makes us better for our customers – riders and drivers alike,” an Uber spokesperson said.
Beyond cab-hailing
Companies are trying to scale up in not only the taxi aggregator business, but also in autos (three-wheelers).
Rapido cofounder Aravind Sanka has said that after launching its auto service during the pandemic, the company has achieved an equal market share compared to Uber in Bengaluru and Hyderabad. Nationally, it has a market share of 18%, Sanka said.
The auto category is now the largest contributor to Rapido’s gross merchandise value (GMV), even though the company is known for its bike-taxi service.
Its GMV increased to $314 million in June compared to $55 million in June 2021, and over 45% of its GMV comes from the auto category, Sanka said.
In April, food delivery platform Swiggy led an $180 million round in Rapido, giving it a 15% stake in the Bengaluru-based mobility firm.
Emerging companies have seized the opportunity by understanding the analytics of consumer problems and patterns, and strategically focusing on solutions in profitable categories.
They have also concentrated on sustainable routes by assuring commuters transparent pricing, on-time pick-up, safety, cleanliness and driver courtesy.
“Those that are agile in moving with consumer requirements will find niches and exploit the spaces being exposed. Management of such a business is much more than a tech platform and works on a foundation of partnership through a customer-centric, collaborative and compliant ecosystem,” said Vinay Piparsania, founder of mobility advisory firm MillenStrat Advisory & Research.
The challenge in shared mobility during the pandemic was that consumers were not comfortable sharing vehicles.
That has changed, and with the economics becoming better, it is bringing back confidence among users, said experts.
“As a natural extension to our ticketing and accommodation business, we started offering last mile solutions like airport transfers, one-way cab transfers, inter and intra-city cab rental,” said Parikshit Choudhury, chief business officer, ground transport, MakeMyTrip, which has tied up with Meru, BluSmart, Mega Cabs and other independent cab operators to offer airport pick up and drop services.
“In one-way transfer, it works for the commuter as they are charged only for one way and also for the cab operator. MakeMyTrip is able to generate a return journey resulting in optimum asset utilisation too,” said Choudhury.
Airport rides and inter-city travel are one of the most lucrative categories within the cab business as they ensure longer rides, and hence more revenue.
“With more evolved and varied commuter mobility needs post-pandemic, drivers/taxi owners find uncertainty and commercial terms of existing arrangements with principals like Ola and Uber difficult,” said Kaushik Madhavan, vice president, mobility practice at Frost and Sullivan.