Railways try to hail Uber, Ola cab again

Ride so far too costly, say the latter; attempt now to sweeten parking spot deal for the cab aggregators

A revenue churning plan for Indian Railways (IR) that would have hitched a ride with cab service aggregators Uber and Ola seems to have got derailed.

According to sources in the know, the two companies have informed IR that they will be unable to continue managing the designated spaces allotted by the national transporter for parking in key stations such as Bengaluru and Mumbai.

Multiple sources said talks are on between IR and the companies to revive the deal.

“We have been in talks with railway officials. However, we are unsure if we will continue with the plan. There are various logistical factors; also, the return on investment was not what we expected. Logistical issues include cabs getting stuck in railway parking lots for hours and our driver partners complaining of tussles with prepaid taxi and auto operators. We are undecided on whether we will continue,” said a top executive in one of the cab aggregators.

Uber and Ola had spent ~100 crore each in setting up parking spots and kiosks at stations. They had taken space at various stations, including Mumbai Central, New Delhi and Bengaluru.

A government official confirmed their exit from the allotted space at Bengaluru station. “In most of these stations, the companies had gone for higher bids. For example, in Bengaluru, they are of the opinion that the ~7 crore for which the contract was awarded is unviable," said the official. The companies have also said they are not ready to take up more stations under the programme.

During 2018-19, the railways earned around ~21 crore from parking slots for cab aggregators. Sources said they might give some cost benefits to the aggregators and larger designated spaces to keep the association and the contracts going. As of now, contractors get a fenced demarcated area, with a booth and permission to park not more than 10 taxis in major stations at a given point of time.

Sources claim that over the past year, the transfer of non-fare operations to zones had slowed the allotment process of parking space to app-based cab service providers. Earlier this year, cab aggregators began going slow on their plans to acquire additional parking rights. They said drivers do not prefer to park their vehicles and wait for customers; instead, they believe in staying mobile to find passengers. The investments by Uber and Ola included setting up of kiosks, incentivising drivers for parking at stations, and payments to IR.