July , 2019
App-cab is the answer
16:58 pm

Kuntala Sarkar

According to data from Statista, the app-based cab market in India is currently estimated at around $675 million. By 2023, this figure is expected to reach $1.3 billion. The market is predominantly concentrated in tier I cities. But some of these start-ups have found their way to expand to tier II and tier III cities as well. However, there is still ample scope for expansion of these apps in urban India.

With the proliferation of internet connectivity and larger penetration of smartphones, it is expected that the
app- based cab market will increase in volume in near future. In India, the market is mostly dominated by Ola and Uber in tier 1 cities with various other players operating in regional markets.

Major players

Some of the major players in India include Ola, Uber, Shuttl, Jugnoo, Zoom Car, Rapido and TukTuk Ride. Ola is offering cabs, auto rickshaws and two-wheelers. Ola has far greater penetration in Indian cities as compared to Uber, whose services are available only in 40 cities. This explains the wide gap between the shares of Indian smartphone holders using the two apps. Ola has also been ahead of Uber in terms of the number of times their app has been installed in India. Most of Ola’s business comes from top metro cities.

Uber is an American multinational transportation network company operating in several countries including India. They also have their subsidiary named Uber Eats which is into food delivery. Shuttl, an app-based shuttle service has become a popular brand among office-goers. RedBus is another company which is now operating in the bus ticket booking segment. It has gained popularity as it makes booking long-distance bus rides simpler. Jugnoo is another interesting app in the transport sector. It connects the user to auto-rickshaw rides and is operating in various tier I and tier II cities.  Zoom Car has gained immense popularity in recent years. It allows users to book self-driven cars and has made traveling simpler. Rapido is another app based company that allows its users to book bike rides for short distance travels.

Payment methods

All these apps have significantly simplified that payment method by making it digital. Most of them are linked to net banking and online wallets. Additionally, customers can also pay in cash after the end of the ride. Many leading app based cab booking companies like Ola and Uber have also initiated a digital time-bound coupon system that enables the users to avoid price surges during high demand periods.

For TukTuk Ride, the customers are charged a flat rate of `14 per km and there is no surge pricing or cancellation fee. The rate is approximately same for Ola and Uber. Additionally, the first ride remains free in most of the cases. TukTuk lets riders get bike taxis at `8 per km. The company also urges riders to make cash payments to ensure immediate earnings for the drivers.

Utility of share cabs

Some of the world’s most congested cities are found in India. On an average, cars in India carry lesser people in a single vehicle and that leads to more air-pollution and traffic congestion. Share cabs or shuttle apps provide facilities within the public transport system with the addition of a certain degree of comfort that is associated with private vehicles. The option is pocket friendly as well as the rates are significantly lower as compared to exclusive cab rides. Additionally, app based transport services allow users to book cabs from their present location at any time of the day. It has made cab rides and other transport bookings a lot simpler. In case of pre-decided travel, one can always pre-schedule a cab ride. Recently Ola and Uber have also come out with their rental plan that allows the user to book a cab for a longer duration. Travelling in these apps powered cabs is a lot safer. There are various options like a robust rating system, emergency buttons, ride-share and live location-sharing that make travelling safer.

Apps like Ola and Uber have provided assured income for thousands of luxury taxi drivers. However, very recently many of these drivers have demanded higher share of earnings. The companies need to look into the issue so as to keep all stakeholders – including cab owners and drivers – in the comfort zone. Similarly, there has been a rising number of complaints from regular users that these cab booking apps are often charging drastically high prices for their services. The companies also need to look into this aspect as well. 

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