Cab aggregators Uber, Ola betting big on ride sharing
BENGALURU: Cab hailing services Uber Technologies Inc. and Ola (ANI technologies Pvt. Ltd) are spending heavily to expand ride sharing, a category that is considered the next big growth driver for both companies.
Shared rides account for about 25-30% of overall trips on Ola and Uber in key cities such as Mumbai, Delhi and Bengaluru, according to three people familiar with the matter.
Both companies have either dropped fares or are running promotions for ride sharing to attract new customers to the service. For instance, Uber has capped carpooling fares at ₹49 for the first 8 km in Delhi, Bengaluru and Chennai.
Ola offers Share Pass, a subscription-based service launched in November last year that offers carpooling at a flat fare, at a steep discount.
Ola is also offering a share pass for five trips at ₹1. Usually, the company offers a five-ride pass for ₹149, while the ones for 20 and 40 rides cost ₹249 and ₹349 per month respectively for the first 8 km.
Ola said in a statement on Monday that more than 20 million carpool rides have been presold through the Share Pass subscription.
“We have seen a high uptake for the category on both the customer as well as the driver partner side. Cities such as Delhi, Bengaluru, Mumbai, Hyderabad, and Kolkata are the biggest users of Ola Share, and to keep the momentum going, we are selling Share Pass at a flat ₹1 in all our Ola Share cities,” Vishal Kaul, chief operating officer of Ola, said in a statement.
The company claims that carpooling, launched in October 2015, has grown 500% in terms of number of rides in the last one year. The company offers carpool in 26 cities as against Uber’s seven.
Uber claims that ride sharing has witnessed maximum uptake in Delhi, Bengaluru, Mumbai and Hyderabad.
“The growing adoption of Uber Pool across the country is very encouraging. The fact that millions of people are willing to share their rides gives us the confidence that we are collectively driving a positive change to reduce carbon footprint,” Shweta Rajpal Kohli, head of policy at Uber India, said in a statement.
Uber India president Amit Jain had told Mint in an interview in March that Uber is lobbying the government to ease regulations to allow the firm to introduce ride sharing using private cars in India.
This is a move that could become a game changer for Uber and its local rival Ola, especially since the services by both firms have been disrupted recently in the wake of drivers’ protests following a drop in incentives.
In the US, Uber’s home market, much of its business comes from the so-called peer-to-peer (P2P) model, where any person who owns a car becomes a driver on Uber’s platform
According to industry experts, ride sharing, with low fares, has emerged as an important customer acquisition mode for both firms.
“With carpooling, Ola and Uber are getting customers who would not otherwise use their services on a daily because of the prices. So the companies are getting access to a set of customers who are cost conscious, do not use a cab on a daily basis and instead use a bus or an autorickshaw,,” said Sreedhar Prasad, partner, e-commerce and startups at KPMG in India. “Most of these consumers are young professionals. Over the time, they will graduate from using a shared car to booking an entire cab, which makes it a brilliant strategy to on-board new customers.”