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Uber, Ola promote cab-sharing services to offset dip in regular rides

However, customers are beginning to look for alternatives to Uber and Ola due to increase in price

Alnoor Peermohamed  |  Bengaluru 

Uber, Ola promote cab-sharing services to offset dip in regular rides

Uber and Ola are promoting ride-sharing services to keep customers on their platforms and offset the dip in rides seen in their regular services due to both cutting costs in their search for profitability. 

In the past six months, Uber and Ola have cut incentives to drivers and have increased fares for riders, which for the first time caused degrowth in the  

According to a report by RedSeer Consulting, India’s ride-hailing market saw degrowth of 5 per cent in the first quarter of 2017.

Both are looking to counter the shift by retaining customers with offers on their shared ride services — Uber has capped rides to Rs 49 while Ola allows customers to prepay for a shared ride at Rs 40. 

watchers say ride sharing is quickly becoming the largest category for Uber as well as Ola.

Yesterday, Ola announced that its ride-sharing service had witnessed a five-fold growth over the past one year. Further, through the company’s share pass offering that allows customers to prepay for shared rides, Ola sold over 20 million trips since the service’s launch in November last year.

Customers are beginning to look for alternatives to Uber and Ola due to the increase in price. The companies, on the other hand, are pitching their ride-sharing services as extremely affordable offerings. 

Moreover, with massive attrition among drivers, both are also looking at ways to drive more business to their partners in the hope to offset decreased incentive payouts.

For drivers, share offers them a chance to complete three trips instead of one, and while the earnings from each of the three customers is lower than an individual trip, the time saved allows them to do more trips each day.

The slowdown in the growth of India’s ride-hailing in 2017 comes on the back of a nearly four-fold increase from 130 million rides in 2015 to 500 million in 2016, according to RedSeer data. 

The growth, which was largely from burning money is reminiscent of how e-commerce grew in India, but players quickly realised that it was not sustainable.

Now, both Uber and Ola are looking at alternatives to boost revenue. Uber has kicked off its Uber Eats service in Mumbai that will take on online food ordering services such as Swiggy and FoodPanda. 

Ola, on the other hand, has been exploring electric mobility, which in the coming years will become cheaper than gasoline-powered cars, as a way to save costs.

First Published: Tue, June 06 2017. 15:48 IST