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BW Businessworld

Editor's Letter: Uberising Travel

How we travel in cities has changed forever. Meru was the first revolution, where a phone call brought a decent, air-conditioned cab home

Photo Credit : Shutterstock


A little over a year ago my two kids patiently explained to me what an e-wallet was and how after a taxi-ride I needn’t pay the driver any money. It was all adjusted via an account in the cloud, they said. I was astounded. “You mean you don’t have to furtively look at a meter to check whether it is rigged, and haggle with the driver,” I told them. “Yeah, it is called Uber. Some use Ola,” they said.

How we travel in cities has changed forever. Meru was the first revolution, where a phone call brought a decent, air-conditioned cab home. But then, there were never any cabs when you wanted them, and over time they began to resemble the old rattle traps. The problem was the company owned the cabs; the drivers didn’t care and frequently went on strike and the promoters didn’t have the funds to scale up. Enter the app-based cab aggregators. They didn’t own the cabs, so they could expand rapidly. All they did was to connect you to one when you tapped your phone. These services multiplied and now many of the young professionals in the community I live have stopped using their cars. “Parking is a hassle near the Bombay High Court, so I uber it down,” one young lawyer remarked.

One day at the airport, I was charged a parking toll of Rs 110 though the Uber cab picked me up outside the complex. Money gone, I said; but I still sent an email lodging my complaint. To my surprise, there was a polite apology and the Rs 110 came back. There was a time when you hailed a cab only if you had to. It was a rough and sweaty experience. It is a comfortable choice today.

So who is winning the race? The startup OlaCabs, launched by two home grown adventurers Bhavish Aggarwal and Ankit Bhati in December 2010, quickly captured 80 per cent of the cab market by 2015. Aggarwal raised $1.3 billion in several rounds of funding and spread quickly to 85 cities, getting into auto aggregation, food supply and many other segments. Uber came later with its international founder Travis Kalanick committing upto $2 billion. Uber’s was a slow start given its insistence on the epay mode; but it quickly learnt the Indian way and is now nosing ahead of Ola in the big cites.

Kalanick’s launch in the US was not too much ahead of Aggarwal. Uber started in 2009 in San Francisco; Ola started in Delhi in 2010. Same business model. Uber today is available in 404 cities spread over 60 countries and is valued at over $60 billion. In India, it operates in 22 cities. Ola is in 102 Indian cities and is valued at $5 billion. Uber clearly has an edge over the future. It has more cash to burn, has focused on the prime Indian cities, has better technology and grooms and keeps a better and more responsive set of drivers. Ola has more ‘desi’ depth and easier apps; but is stretched too thin into services and cities that give little return.

We are also yet to see the rough end of these aggregator taxi chains. Drivers are supposed to be partners; but Uber technology makes them slaves bound to the customer rating system, and falling returns. London and hundreds of other cities have seen driver protests; India will soon too. For all this and more read the cover story penned by associate editor Ayushman Baruah.

We did a cover story of Prime Minister Narendra Modi completing his first year in office last May. Another year has gone by, and it seems barely days ago. To review the Prime Minister’s two years, we also bring you some cutting-edge columns and a popularity survey that is indeed startling. I won’t tell you the results; you have to read it!