You are here: Home » Companies » News
Business Standard

Ola, Uber to tie up with railways, airports, metros for easy booking kiosks

Growth of ride-hailing services slowed in 2017 as base of early adopters dried up

Alnoor Peermohamed  |  Bengaluru 

Uber Quarterly results

After witnessing slowing growth over the past 18 months, India’s ride-hailing bigwigs are partnering mass transit Both and have been tying up with mass transit companies, setting up easy-booking kiosks at metro stations and airports to grow user base.

“Growth definitely slowed in 2017, but the market did not decline. This had to happen since every time you have a new concept, there will be early adopters, and then it will reach a level of incremental growth. That is the stage the market is entering now, and that is why there is a change in strategy of these firms,” said Jaspal Singh, partner at Valoriser Consultants.

Ride hailing still has a long way to go in replacing car ownership, but the market is beginning to mature in India. Customers are beginning to pay for rides even when fares are not heavily subsidised, while budget-conscious users are opting for services such as ride-sharing that both the firms offer.

On the driver front, both players saw a slight dip in growth due to higher-than-normal churn when incentives were slashed. But a drive to bring new partners onboard through leasing programmes equalised a lot of that, Singh said. Overall, while the industry did see growth dip, the number of rides on the two platforms continued to grow.

corroborated Singh’s observations that the ride-hailing players are partnering public utilities to grow. However, the firm maintained that it had seen strong growth through 2017, and that it was continuing to expand in more cities. “We are consistently broadening our product portfolio with solutions like Share, Ola Auto, Ola Electric, Ola Pedal. Ola is also integrating with public utilities like railways, metro and airports to enable easy last-mile access to mobility,” said a spokesperson.

A source within Ola pegged the number of rides the company does on a daily basis at 2 million. These include shared rides, regular cab rides, rides taken in shuttle buses, autos and even on Ola’s new bicycle sharing platform. Ola has seen to be increasing its focus on low-cost auto rickshaws as customers began feeling a pinch due to increased cab fares.

Ola’s rival Uber, on the other hand, refuted the claim that it saw growth slowing during 2017. “This is factually incorrect and a gross misrepresentation of the market realities. In 2017, we were focused on moving from a startup to a sustainable business in India and as a result, recorded over 100 per cent growth,” a spokesperson said.

The statement added that in July, the company saw over 115 per cent growth in the number of rides, the latest available public data on Uber’s growth in the country. said it records over 1 million trips a day, or half the number of trips claimed by the source in Ola. The Indian firm, however, did not officially comment on the number of daily trips it was doing.

Shifting focus

  • Growth of ride-hailing services slowed in 2017 as base of early adopters dried up
  • Uber, Ola now focusing on tie-ups with mass transit firms to tap new users
  • While the industry did see growth dip, the number of rides on the two platforms continued to grow

With holding 20 per cent stake in Uber’s global operations and a 25 per cent stake in Ola, experts opine that both will arrive at an agreement to stop burning money trying to grab market share from each other. The move could result in a rationalisation of fares on both platforms, which could even hurt their businesses, but slightly.

“I do not think there will be a major impact on ride-hailing services by a slight increase in fares. We have seen that customers are willing to pay 15-20 per cent more than what and Ola are charging. What they will have to focus on is reducing wait times, which is among the biggest factor when it comes to a customer picking between the two services,” said Anil Kumar, chief executive officer of RedSeer Consulting.

Kumar adds that users of ride-hailing services in India have both apps installed on their smartphones and often compare fares and wait times before making a booking.

Singh said there was enough space for both services to grow in the near future. He said SoftBank’s strategy of favouring local firms over global ones might eventually lead to Uber’s India operations being absorbed by Ola, but for now both have set targets. “Uber is working on self-driving in the US, but these are not going to come to India anytime soon. In India, the bet on electric mobility makes a lot more sense and we should start seeing more focus on that by Uber’s India development centres are continuing to play a crucial role for innovation in the company,” Singh said.

First Published: Thu, January 04 2018. 09:26 IST