India due to its sheer consumer size is a very attractive market for all, including those in mobility business like Uber, which work as a service provider. Though Uber’s size in India is very small when compared with its business in other countries, the size of Indian market makes it a significant player.
India, is one of the few markets where Uber runs a multi modal business — connecting riders with drivers through its two-, three- and four-wheeler products and is soon planning to launch high capacity vehicles such as buses.
Mike Orgill, Senior Director, Public Policy & Government Relations, Uber for the APAC region, clearly knows the challenges which the company faces to further stabilise in this market. Chatting with BusinessLine at the Uber office in Sydney, he shared his thoughts on what is in store for the company in India and why peer-to-peer ridesharing can prove to be a gamechanger.
He also ran through the study commissioned by his company on “The Impact of Uber in India: How Uber has transformed the on-demand economy April 2022.”
The study undertaken by Public First, a global strategic consultancy, and commissioned by Uber, has derived all economic estimates from official, third-party and proprietary information. “In 2021, Uber unlocked an estimated ₹44,600 crore in economic value for the Indian economy. This includes both the impact of earnings of driver-partners and the wider indirect and induced multiplier effect created throughout the company’s wider supply chain,” it said. Excerpts:
Uber has had its own challenges in India. Though the Centre has issued the Motor Vehicle Aggregator Guidelines, the States have their own rules. Do you approach each State differently or do you have an umbrella formula which applies to all?
We are working off standards or guidelines issued by the Centre after close consultations with all stakeholders. We have given our feedback to the Ministry of Road Transport and Highways on specific guidelines. We would like for the rules to be as simple and consistent but we are happy to work State-by-State. We are keen to talk about how to expand the service even more, particularly to allow peer to peer ridesharing (peer to peer allows for non-commercial vehicles to be used to move people on platforms like Uber).
Meanwhile, States have their own needs and particular way of regulating. Ideally, it is easy if everything is same, but that is not how it works. So, we try to make rules simple and consistent, while also following what the States need.
Uber India is still young compared to its other business. Is there any India target — short term or long term? Any target of break-even period?
As a company, we don’t comment on internal metrics like this.
W hen you are working your pricing mechanism for markets like India, how much does the local dynamics influence your decision making?
We customise the pricing locally. Different markets, even in India, have different fare structures. Recently, we tweaked our prices when fuel prices went up. In the Indian context, you must remember that States also set their guidelines and we have to operate within those guidelines.
At Uber, we have fairly flexible mechanism looking at all stakeholders – consumers, drivers – and we try to match their expectations as much as possible. We try to be as dynamic as possible and be flexible.
Lobbying is a sin word in many places. There were allegations of Uber indulging in it in India. How does it work globally?
We seek to understand the landscape of regulators, policymakers and others who have a bearing on our business, drivers and customers. That means meeting with a wide-range of stakeholders.We have championed rules and regulations that reflect changing technology and correspond with the interests of our customers and those earning on our platform.
India seems to have advantage over countries like Australia as far as Social Security Code is concerned. How much do you think it will help in bringing stability in business like yours which offers flexi work environment?
Yes, most people want security and predictable work space. In India, the social security code does give some security. Therefore, people can now opt for whether they want a regular job or a flexi job, as is the case with Uber. In fact, we are in talks with the Australian government on the same now.
You said you want to be regulated. How much and how far?
Actually we want to have standards that make sense for both the consumers and drivers. Regulations are important because we operate in a competitive environment. So it is important that we have a common set of standards. It is not good to have things open ended. Without regulations, you might get into a situation where you might not be doing everything right for either the customers or drivers.
While we don’t mind the regulations, what is important is how you regulate it. We get tough questions here in Australia, too, we also get fined if we don’t follow proper norms. That is a normal thing to do.
Uber has been talking about EVs now. What is your strategy for India?
At this stage, what we are trying to do is to help drivers get access to vehicles that makes sense to them to recoup their costs. Everyone who is going in for EVs has this question — “Will I earn enough to pay for this asset which depreciates over time?” There are somethings we can do to help bring down these costs, for example, work with lenders to get good discounts, work with OEMs or vehicle manufacturers (like we did in the US. We tied up with Tesla for drivers to take advantage of).
We are seeing what are the really viable things that we can do to make it attractive for Indian drivers. We want to help create an entire ecosystem.
(The writer was in Sydney recently on invitation from Uber)