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BW Businessworld

The Booming Uber-ian Economy

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If you have a car in one of the metros with a commercial number plate chances are it’s “ache din” for you.  Uber, Ola, Meru, the list is endless as is the money raining on these apps from global investors like  Sequoia , ABG Capital, Accel Partners, Mauritius Investments, Tiger and other.  It has changed the fortunes of taxi drivers in the metros. Ola for instance is funded by DST Global in it’s latest round to the tune, standing at a valuation of $3.5 billion.

Your Personal Driver
I didn’t know I had a personal driver until I was introduced to everyone’s private driver i.e. Uber, by my economist friend, a professor at ISB.  He is a no nonsense person and coming from him anything really seems of value.  Little did I know this introduction will turn into a relationship in the coming days.  As destiny would have it, I had an accident and with my car at the workshop it was time for me to Uber for the next 2 weeks.
 
The Great Income Survey
It took less than 5 minutes for the first Uber to arrive at my gate. Curious to know how it’s all working and why are the rates what they are @Rs 9 for a brand new sedan, I ended up asking the driver two questions, the ownership and income. I won’t dare ask these questions to anyone else but I guess some curious part in me wanting to understand the logic between increasing fuel prices and decreasing cab prices got the better of me.
 
Puneet Mehrotra
Having used a double figure of these cabs via apps, I can safely answer these questions with authority. The average Uber driver earns between Rs.60,000 and Rs 1,00,000 per month in the UberX category depending on how active they are. The ownership has been 100 per cent driver owned. The wiser drivers have tied with up Uber, Ola, Taxiforsure and others. 

The Power of  Apps
More startling revelations.  One evening on a ride back home, I was playing the anti-tech guy. I asked the cab driver apps like Uber don’t even have a call centre number in India to look into your complaints, what good are they really in the Indian reality?  The answer was startling. The cab driver said, the app is so friendly, why do you want to call up a phone number at all? These days everyone uses apps,  you don’t you use apps or what?
 
That answer felt like the Flipkart advertisement on TV in which the petrol attendant tells the urban, educated guy in afancy car,  hassled over weekend family purchasing, “Flipkart ka app download kiya kya”.
 
Technology & Apps: The Leveller
Being privy to research reports on technology I can safely say the average Indian on the road is far more tech savvy than the research predicts.  The benefits of technology and apps is startling to trickle down to the man on the street. Technology is no longer some exquisite diamond in the possession of the elite. It is becoming the leveller.  Think about it. Today the average smartphone in our hands is at least tens or hundreds a time smarter than the super computer of 70’s at less than 10000th the cost.  
 
STD booths in 80’s 90’s created more employment than any government scheme aimed at that. Technology and apps are not just powering but also facilitating self employment.
 
The Last Word
The trail of money is fascinating. Some pensioner in the United States or maybe in the United Kingdom, invests in some mutual fund. The mutual fund in turn invests into smaller venture funds and yet smaller funds are funding someone’s vision which he had in the dormitory and the taxi driver’s income is increasing by almost 500  to 1000 per cent  in India.  The logical part in me may ask “how will they make money if at all they will ever make money?” Business Insider in a article said Uber will generate $10 billion in revenue by 2015 end.
 
Predicting the future based on present would be re-creating the present. The future is another time, another story. Who knows what will be sparked off in the neuro-pathways of the founders and inventors? Or even revenue models? Let’s wait and watch. When the perfect sculpture is etched, a lot of stone is wasted. What matters is the perfection. We remember  Michelangelo for the perfection he created and not the waste that he threw away in it’s making. In 2015, we remember Google not the Altavistas of the 2000’s.
 
Puneet Mehrotra writes on business and technology.
email [email protected]
 
 
 
 
 
 


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