After two years of a slowdown caused by Covid, the mobility-aggregator business is seeing an accelerated turnaround. But the revival is being driven by new entrants who are challenging the dominance of ride-hailing giants Ola and Uber.
GROWTH SURGE
These include Rapido in the auto category; Blu Smart, with its electric car fleet in Delhi-NCR and Bengaluru; Drife, with a blockchain-based business model headquartered in Bengaluru; Shoffr, a premium taxi service, and several new firms operating specifically in the lucrative airport and inter-city service segments, as well as online travel agents like Makemytrip and even airlines, who are offering airport transport as part of their value-added services. These newer players, which are gaining traction, are deploying AI features, offering attractive packages for drivers, lower prices, more convenient booking options, the ability to negotiate fares and features to book rides in advance.
“At a monthly level, we get more than 20 lakh new user registrations,” said Pavan Guntupalli, co-founder, Rapido. Rapido currently operates 13 lakh rides per day across all categories and is expanding fleets in the coming six months with 10 lakh more vehicles facilitating 7-8 lakh more rides across 90 cities.
“In Hyderabad, we launched Auto Plus, a premium service in the autorickshaw category. The no-cancellation policy feature plays a crucial role in relieving the rampant consumer anxiety around the availability of rides and optimises on ensuring a dependable transportation service,” said Guntupalli.
DRIVERS OF BUSINESS
The giant two have also bounced back from pandemic declines. According to data capture platform Vumonic, Uber has surpassed its earlier peak volumes. Its newly-introduced three-wheeler hire segment is growing at 250%, while the original cab-hailing segment is seeing growth of between 10% and 25%.
“Our business has witnessed a demand surge, significantly surpassing the pre-pandemic levels. A significant number of users are embracing alternative mobility options including two-wheelers and threewheelers,” said the Ola spokesperson. “We can see a 52% increase in overall Ola and Uber rides in FY2023 compared to FY2020. In metro cities, it is a 41% increase in rides,” noted the Vumonic report.
That gap between metro and other markets where Uber and Ola are on a less strong footing is being filled by new entrants, who have managed to gain customers quickly with offerings like airport transfer services, said Shaik Salauddin, the Indian driver-turned-gig workers’ union leader. He added that in some markets, like Hyderabad, Kolkata and Guwahati, local governments are looking at launching official cab services promising drivers better commissions. The legacy players are adopting some of these customer-friendly features as well.
According to Ola, its Ola Prime Plus, a recently-introduced premium service in five cities comes with “ride assurance”, so that customers aren’t faced with unexpected cancellations. Uber also now offers a pre-booking option called ‘Reserve’ in 13 cities, and it is popular with consumers, said an Uber spokesperson.
“We are upwards of pre-pandemic levels since the first quarter of this year, decisively moving from recovery to growth mode, registering our best weeks ever in this quarter –– be it on number of trips or number of active drivers on the platform,” they added. Uber is also running bus pilots in Gurgaon and Bengaluru, and plans to launch high-capacity vehicles on hire which ensure that more people travel in shared vehicles, thus easing road congestion.
PLYING FAIR
Shashikanth Kanaparthi, founder of Volta, an app-based cab service, said that since drivers are not happy paying such high commissions, they charge no commission. “Unlike other app services, our drivers get paid as soon as the ride is done,” he explained. Volta is launching next month in Hyderabad and Pune.
Rabi Choudhury, MD, Peindia Cab, which operates in Guwahati and Kolkata, said drivers here pay a maximum of 10% commission and 5% GST unlike on other ride-hailing platforms where commissions can go up to 30%. With the rapid recovery of leisure and business travel, the demand for airport rides and intercity travel has been steadily increasing. It is one of the most lucrative categories within the cab business as it ensures longer rides, and hence more revenue. Mumbai-based IT engineer, Pranav Iyer uses the Shoffr services when he travels on work in Bangalore.
“All my airport rides are with Shoffr,” said he. So does Hyderabad-based Anwar Sheikh, who clusters meetings in neighbourhoods and uses the OHM cab service, which he said he finds reasonable and reliable, unlike other leading ride-hailing platforms. “These new entrants are offering a variety of relevant value propositions, such as lower prices, more convenient booking options, the ability to negotiate fares, the ability to book rides in advance, and offering sustainable transportation options such as electric vehicles,” said Vinay Piparsania, Principal, MillenStrat Advisory & Research.
“Happy drivers lead to happy customers,” said Vikas Bardia, founder of Shoffr, a premium taxi service that has an all-electric fleet. Shoffr, which launched last November, operates only in Bengaluru in the airport transfer and rental space. “While demand is back, the overall supply is much less leading to poor quality of service. This gives new entrants a chance,” said Bardia.
“There is a lot of vacuum to be filled,” said Nirmal Reddy, CEO, OHM, a cab operator based out of Hyderabad that is focused on airport transfers. They have 135 EVs in their fleet and hope to add another 300 cars by October end. OHM launches in those markets where the airport is 15-20 km away.
BUILDING THE FLEET
In a bustling city like Bengaluru, the demand for ride-hailing services reaches remarkable heights during weekends –– with more than 200,000 rides in a single day. According to Tanveer Pasha, president of OlaUber cab drivers’ association, there are about 45,000 Ola and Uber taxis in Bengaluru city, down from over 100,000 in pre-pandemic times.
“There is a huge demand-supply mismatch which is being met by autos, which are currently around 1.25 lakh to 1.3 lakh here,” said he. “Currently, our network has 20,000 drivers. With the need for shorter ride solutions, we plan to integrate auto-rickshaws into our existing fleet with the addition of 20,000 autorickshaw drivers in the next quarter,” said Firdosh Sheikh, CEO and cofounder, Drife, a block-chain based ride-hailing service that allows users to determine their own fares and drivers to receive payouts daily. As a one-stop solution for travellers, MakeMyTrip offers airport transfers and outstation cabs.
“We have tie-ups with our partners like BluSmart, WTI for airport transfers which help us control quality of user experience. For outstation cabs, we have built our supply with a fleet of over 11,000 vehicles with a presence across 190 cities,” said Rajesh Magow, co-founder and Group CEO, MakeMyTrip. Airlines too have started sending messages to pre-book a ‘comfortable’ ride to the airport. For instance, Vistara has a tie-up with cab service partner, Avis, for both departures and arrivals.
