As Uber hunts it down, Ola turns to autos to help it win in tier 2 towns

In order to tap the market for drivers of these autorickshaws, Ola has also launched its driver app in 8 languages

India’s leading taxi hailing service Ola is turning to autorickshaws to help it stay ahead of global rival Uber in the country. The firm has launched its on-demand auto rickshaw service in twelve more tier 2 cities such as Nagpur, Visakhapatnam and Surat, boosting its presence to twenty four cities.

Ola which operates its cab service in 102 cities across India and says it has 350,000 cabs on its platform, is targeting two million rides from the autorickshaw category alone by the end of 2017. Currently, the market for autos in the 24 cities it has a presence in, sees 30 million daily rides, fulfilled by three million autorickshaws.

While the company looked at autos as a way to enable last-mile connectivity and fulfil short trips in larger metros, it sees autos as a full-fledged transport solution in tier 2 towns.

“Different cities have different use cases. In cities where we do not see a lot of transportation mediums available, we see autos being use for all kinds of trips. But in larger cities, where other forms of transport is available, we mostly see them being used for short trips,” said Nitish Prakash, senior director of operations for Ola Auto.

With a claimed 100,000 autos on its platform today, autos also help the company rapidly expand its base, as a large number of vehicles already ply the country’s roads, eliminating the need to add new vehicles.

In order to tap the market for drivers of these autorickshaws, the company has also launched its driver app in 8 languages - English, Bengali, Gujarati, Hindi, Kannada, Marathi, Tamil and Telugu. For customers, riding in an auto will offer the same experience as that of a cab, with users having access to the SOS safety feature and ability to pay digitally.

“What we have learnt in the past year and a half is that you need a deeper understanding of the local auto driver communities and that’s where we see local innovation has worked for us. We have eight different local languages and even for these guys to reach us offline we have an office in every one of these cities,” said Prakash.

Uber, the pioneer of the on-demand cab model, shut its autorickshaw service in Delhi which it was running as a pilot in December last year. The company has not indicated if it would relaunch the service in India and expand it across other cities. In the meanwhile, the company is now experimenting with bike taxis, but has been forced to stop the service after running into trouble with the Karnataka government.

Moreover, in the taxi segment, Uber has been able to close the gap between Ola in the two and a half years it has been operational here. According to RedSeer Management Consulting, a research and advisory firm that tracks online businesses in India, while Ola did between 9-10 million rides in February 2016, Uber managed to do 6-7 million rides.

With both companies adopting an open cheque policy to grow their business in India, they’ve pledged to invest over $2.25 billion (approx 15,000 crore) in the country. Neither company owns the cabs, autos, buses or bikes operating on their platform, which means most of the money is being spent on incentivising rides for customers and drivers and splurging on advertising.