Uber India witnesses strong growth; plans to double driver base by 2018

The Indian arm is the second largest unit for the company, crosses 500 mn trips milestone

Ride-hailing behemoth Uber aims to double its base of drivers in India to one million by 2018, while putting out several fires including the search for a new CEO to replace founder Travis Kalanick.

On Thursday, Uber India, the second largest unit for the company announced that it had crossed the 500-million trips milestone. The company said it was witnessing a strong growth in India of almost 250 per cent year-on-year as of June.

"Achieving new milestones and continuing our exponential growth journey is a reflection of a strong business we're building in India. I'm humbled at the pace at which Uber has grown and the impact we continue to make in the lives of our riders, driver partners and the cities we operate in," said Amit Jain, President at Uber India, in a statement.

Uber kicked off its Indian arm in August 2013 with just three employees and serving riders only in Bengaluru. Today, the company has a team of over 1,000 people who run the business across 29 cities and develop features specifically for its Indian users. Uber claims that it is the largest ride-hailing service in India with over 450,000 registered drivers and five million weekly active riders on its platform. Refuting this, Ola says that it has over 650,000 drivers on its platform spread across cabs, bikes, autos and buses.

At a time when Uber talks of healthy double-digit growth of its service, a report by RedSeer pointed out that the ride-hailing market shrunk by 5 per cent in the first quarter of 2017. Moreover, the drop in incentives has led to a considerable fall of available drivers on both platforms.

Further, driver unions and even the Indian government are now looking to enter the market. In Bengaluru, a group of 25,000 drivers, roughly a quarter of total partners of both Uber and Ola, have built their own app, backed by Janta Dal (Secular).

The drivers' own app in Bengaluru promises to fix fares for rides starting at around Rs 12 per kilometre. At that fare, they could end up undercutting the cost of Uber and Ola, which charge a rough average of Rs 15 per kilometre for a private cab in a city like Bengaluru.

Nitin Gadkari, the Union Minister for Road Transport and Highways recently said that the government will build its very own ride-hailing app. The feasibility of such rival services is questionable.

While drivers are looking at alternatives, one of the indicators of unwillingness to pay higher fares comes from Uber itself. The company claims that 25 per cent of all its rides come from UberPOOL, the service that offers trips at half the cost of booking a private cab on Uber.