Uber's rumoured tie-up with BluSmart to achieve green goals under a cloud

Given both customer and driver dissatisfaction with Uber, partnering with BluSmart's EV fleet would augment both Uber's EV cab strength, as well as help it on its mission to zero-emission by 2040

Until a couple of days ago, BluSmart was one of a handful of Indian startups that seemed to be making real change, observable and quantifiable in the real world, with its all-electric vehicle taxi aggregator service. It even let riders know how much carbon dioxide they had saved per ride, giving them the feeling of a tangible contribution to the environment. Clean cabs, polite drivers, and a no-cancellation policy were the icing on the cake.

 

All of which made it a legitimate, attractive target for Uber, the US-founded taxi aggregator that sparked copycats in many geographies. The industry grapevine alternated between a partnership between the two and a full takeover of BluSmart's EV fleet.

 

That was until yesterday. Then it all came unwound faster than a Blusmart 20-minute express ride could reach you.

 

The BluSmart deal is now under a cloud of uncertainty after markets regulator Securities and Exchange Board of India (Sebi) pulled up the firm's founders for misappropriation of funds, and barred them from the securities market as well as from holding any key managerial positions in a listed firm. 

 

The immediate fallout, sources said, is that that while the founders of BluSmart are looking at legal options, Uber is already re-evaluating its strategy.

 

Nonetheless, the fact remains that Uber needs more EV fleet providers to grow its business, not least because booking an Uber in metro cities like Mumbai, Delhi and Bengaluru is turning out to be stressful for both riders and driver-partners.

 

Social media is rife with complaints from customers that getting a cab on time is becoming a herculean task: 80% of cancelled are from the driver's side, while long wait times for a ride force the customer to cancel on their own, despite the fact that Uber has slashed rates for customers by 30-40 per cent.

 

Over a period of a month Business Standard spoke to more than 15 Uber driver-partners in Mumbai, all of whom confirmed the developments. In fact, almost all of them had one piece of advice: 'Stop booking Uber cabs.'

 

“Remove the Uber app from your phone. We are not taking a booking from Uber. We prefer Rapido,” said one of the Uber drivers. Another complained that while charges for riders have been dropped significantly on the app, the commission charged by Uber to drivers remains high. “The rates that Uber is giving (to customers) are absurd. But Uber continues to charge a hefty commission of 25-30 per cent from us,” complained a third driver.

 

A majority of the drivers said that they prefer moving to Rapido and InDrive as these two platforms do not charge hefty commissions. “Rapido started as a zero-commission platform, but has now started to charge. But even then they are reasonable,” said another driver in Mumbai.

 

According to several cab drivers, Rapido has a so-called ‘recharge’ amount. If the driver recharges for Rs 82, they get business of Rs 1,000 per day. The higher the recharge amount, higher the business for the driver. “I don’t mind this recharge as the bulk of the amount comes to me. This is better than Uber and Ola any time,” said a driver.

 

Most of the drivers that Business Standard spoke to said that they are no longer using the Uber app to get rides. Even if they do, they always cross-check with Rapido for options and end up canceling the Uber ride most of of the time.

 

“They keep calling us and ask why we are cancelling our rides, but they are not acting on our demands. We have so many times told them that the booking price they are offering is not realistic, but it doesn’t matter to them,” said a driver who is using Uber, Ola, Rapido and InDrive apps.

 

Drivers also suspect that the company is shifting its focus to electric vehicles. In fact, Uber has over the past two years, since 2023, shifted gears by focusing on providing EVs through its Uber Green fleet, as part of its eco-friendly drive and its zero-emission goal globally by 2040.

 

In 2023, it entered into a partnership with fleet partners such as Lithium Urban Technologies, Everest Fleet, and Moove. Earlier this year it announced a partnership with Refex Green Mobility. In 2023, according to reports, Uber was scheduled to add 25,000 electric cars. It had also announced plans to add 10,000 electric two-wheelers as well. Data on how many cars it has in its EV fleet was not immediately available.

 

The EV model works well for Uber, say several drivers. “One, the fleet of cars is owned and maintained by the fleet services provider. The drivers get a salary and they have to pick up the car and drop it at a selected place. Uber just pays upfront fee to the fleet provider,” explained the driver.

 

By getting BluSmart on board, Uber hopes to get access to its large fleet of 8,500 cars across India with the largest segment in Delhi/NCR, where it was launched. “BluSmart cabs currently have an average of 6-7 trips a day. When available on the Uber platform, it is expected that it would increase to 9-10 trips a day. This would bolster the company’s efforts to break-even on the costs of their vehicles,” said a source with knowledge of the ongoing discussion.

 

BluSmart's EV cabs would also run on the Uber platform under the Uber Green category which offers electric options. And with dedicated hubs, the onus of charging and maintenance would also be on the aggregator rather than the driver, ensuring a cleaner, smoother ride for all.

 

But with the latest roadblock that BluSmart seems to have run into, it remains to be seen if Uber's plans for a tie-up can stay the course.