BluSmart's shock exit leaves India's green mobility market up for grabs

BluSmart’s abrupt exit from the market has set the stage for a market grab by rivals Uber, Ola, Rapido, and inDrive. And early signs indicate that Uber may end up with the biggest share of the pie. Several users now say that Uber will become their preferred option, and investors predict that the market leader will further consolidate its dominance.

 

According to data from brokerage firm Motilal Oswal published in January, Uber leads the country’s cab-hailing market on average daily rides and monthly active users.

 

The US-based company is way ahead of competitors with 840,000 daily rides, followed by Ola (460,000), and Rapido (320,000). Similarly, Uber has 33.6 million monthly active users while Rapido has 31.8 million and Ola has 28.6 million.

 

A few regular BluSmart users say they are inclined to use Uber with BluSmart services no longer available. Somil Agrawal, a Gurugram-based marketing professional and a loyal BluSmart user until now, says he would prefer Uber for his daily commute and airport drops. He calls it “the next best alternative”.

 

Yashasvi Shailly, another BluSmart regular, echoes Agrawal’s thoughts and says she will use Uber for her daily commute over other ride-hailing applications.

 

“I am sad that BluSmart is going away, it was the mental peace that I was paying for as I didn’t have to haggle and drivers were good enough,” she says. “For now, I will use Uber as Rapido doesn’t give me enough payment options — it’s mostly UPI (unified payments interface) or cash which I generally don’t carry.” 

 

“I have had bad experiences with Ola as they don’t switch on the air conditioning and take routes not shown on Google Maps, leading to an unsafe experience,” she adds.

 

She further informs that her BluSmart wallet amount of ₹16,474 was refunded on Friday, a day after she posted about it on social media and approached the company’s helpline.

 

Beyond users, investors say that the BluSmart fiasco will be an opportunity for market leaders to strengthen their businesses.

 

Mrunal Jhaveri, founding partner of venture capital firm ICE.vc, says: “Whenever a service shuts down, even temporarily, other players are bound to benefit and that is what we will see here. Ola and Uber have massive reach and they will naturally absorb some of the demand. The demand in the electric cab space will be picked up by Uber Green, GrEL Cabs, and Shoffr.”

 

He adds that another US-based player, inDrive, is gaining attention as its pricing strategy is unique and appeals to a price-conscious audience.

 

Jhaveri says ICE.vc had invested in BluSmart at the seed stage in 2019 but exited the company in 2023 after it saw a mismatch in growth figures and felt that access to the founders was shrinking.

 

Another investor, Lloyd Mathias, who sits on the boards of several companies, says that Uber is likely to be the biggest winner after BluSmart’s exit.

 

“As of now, it seems the single-biggest gainer would be Uber because there is some talk of Uber taking over BluSmart operations. But overall, the largest players get the biggest share. The gains will naturally come to it because BluSmart was a premium ride-hailing service and in that sense Uber has the best premium ride-hailing option,” Mathias says.

 

He adds that Uber can easily ramp up its business as it’s an international player and has deeper pockets being part of a global organisation.

 

Rahul Bajaj, founder of deep-tech start-up Digital Darwin, says Uber may emerge as the biggest winner while consumers will be the biggest losers.

 

“The market will shift to one of the two major ride-hailing businesses, Uber and Ola, but most likely it will be Uber. If we look at the history, BluSmart was already providing a fleet to Uber. Given there is already a relationship, Uber is likely to gain from BluSmart’s downfall,” he says.

 

While investors and a section of users bet on dominant players, Rapido and inDrive are also enhancing operations. Rapido, which is currently available in just over 270 cities, aims to expand to 500 cities by October.

 

Meanwhile, inDrive raised $150 million from General Catalyst in a Series C funding round to expand its service offerings and enter new markets. According to data from market intelligence firm Tracxn, the company’s total equity funding stands at $387 million.

 

Business Standard’s email to BluSmart about the impact of the shutdown on the company’s market share went unanswered until the time of going to press.