Uber enters auto rickshaw segment now

There's a two-pronged advantage to this: Uber will shed its 'premium' image and it will rival Ola as well

San Francisco-based Uber has forayed into auto rickshaw aggregation services in New Delhi. The services will be initially cash only service in the national capital. This would mean a direct competition for Bhavish Aggarwal-led Ola, which was the first to offer auto services apart from the primary business of cab aggregation.

Business Standard first reported on April 2 that Uber was planning to foray into auto rickshaw services.

This is the first time Uber is entering a space outside of taxi aggregation in India. This could be an additional revenue stream for Uber in the long run.

Unlike Ola, for Uber Auto services, there won't be additional charges apart from the registered fare. For Ola, commuters need to pay additional Rs 10 on the registered fare as convenience charge.

For the auto services, Ola does not charge any commission from the drivers on its network for every ride. Instead, drivers get a commission in the range of Rs 1,500 a month. However, when Ola had started its services for autos, it began with a monthly payment of Rs 5,000 to the drivers, later reduced to about Rs 3,000 a month. The passenger pays an additional Rs 10 as a convenience charge on the total fare.

Uber's entry into auto services would be in line with the company's effort to shed its 'premium' image among consumers in India. Ola, with the largest network in India, has positioned itself as a mass market brand, with one of the lowest fares being its characteristic.

Uber cut its fares by about 30 per cent to gain market share after the acquisition of TaxiForSure by Ola.