The cab wars: All keen to take you for a ride…literally

Jessu John | Updated on March 13, 2018

Taxi rental brands vying for rides on Indian roads haven’t arrived at a perfect market formula yet

Not long ago, if one had to hail a cab to the airport or a ride for a special occasion, Meru was the first name that popped into one’s head. But some four years after Meru Cabs was launched, TaxiForSure tested itself in the Bangalore market. Today, its spokespersons claim it is the fastest growing aggregator in India. It has presence in 14 cities, some 6,000 drivers and 400 operators on board.

Similarly, Uber, the baby of the lot, is no shy operator. Preferring to identify itself as a technology company, Uber has been known to lead disruption in most of its markets across the world. With Uber in the fray, other players in the sector that began as radio taxi companies have also taken the app route to change the way consumers call their rides. However, according to a report by SoftBank, at present, Ola has the largest market share of them all and reigns supreme with over 50,000 cabs across 28 cities in India since kicking off in 2011, the same year as TaxiForSure.

Healthy model, sensitive pricing

Ola wooed the majority with a signature hello tune and a mobile app (launched shortly before Uber’s entry into the Indian market). The sector enjoys a good deal of investor interest but the challenger of them all, TaxiForSure, has kept one eye on the mistakes of older players and the other on the new kid on the block, never letting it go out of its sight. TaxiForSure upped its game by providing discount schemes.

And Uber, prior to the recent rape incident in New Delhi, was shaping up to be a force to reckon with. While Meru Cabs may have had the luxury of being one of the first players, its business model was conventional at the outset. It invested in its own fleet of cars. Later entrants, such as Ola and TaxiForSure, took the asset-light route, working with operators, which worked in their favour.

Siddhartha Pahwa, CEO of Meru Cabs, says, “In 2007, we were pioneers in this space. The experience of a good cab ride wasn’t there. So we had to invest in our own fleet of vehicles. We had a plan — we were clear that once the industry developed to a certain level, we would shift to the asset-light model.” The asset-light model invites the question of standardisation of service being affected. To address this, Meru Cabs claims it trains its drivers and carries out monthly checks on its fleets, thereby ensuring that repairs and cleanliness of cars is maintained. Now, Meru Cabs operates largely on an aggregator model, according to Pahwa.

While Ola may have grabbed attention by winning accolades like best startup of the year, many Uber users claim they don’t wait too long for a cab anymore and TaxiForSure aims at a 1,000 per cent growth year-on-year. The latter two are bent on disturbing the status quo that has Ola established as a market leader.

“We work with operators, other rental companies work with drivers directly. We give operators, even mom-and-pop shops, the technology to operate. We’ll be in over 50 cities by March 2015,” says Aprameya Radhakrishna, co-founder and director of TaxiForSure.

Bhavik Rathod, General Manager, Bangalore, Uber Technologies, counters, “Before Uber, people waited an hour or more for their ride. We’ve been able to provide a ride in under 10 minutes in most cases. We’ve entered 10 cities here within a year. For us, India is the second largest market after the US.”

TaxiForSure recently slashed fares for distances up to 4 km, categorising them as ‘short rides’. Its DiscountForSure benefit is aimed at enabling customers to travel with TaxiForSure during the current festive season. During Diwali, for a period of a month, customers in Delhi, Bangalore, Chennai, Hyderabad and Mumbai were treated to a ₹1 ride, enabling more users to experience cab rides, with TaxiForSure positioning itself as an alternative to auto rickshaws.

“TaxiforSure is also proud to own the shorter-ride solution. We’ve seen an increased efficiency amongst operators as well as their drivers. So it’s a win-win scenario for all,” Radhakrishna further explains.

Uber’s Rathod says, “We like to provide the cheapest ride, but we also cater to different price points with a range of products. So, overall, we don’t aim to be the cheapest, though our UberGo product does. But UberBlack and UberX will never be cheaper than an auto or a taxi in some cases. Also, affordability is not at the cost of safety and reliability.

“Our focus is less on competition and more on our value proposition and the experience we deliver. As an international name, disruption is the aim in most of our new markets.”

Inside out approach

Uber leverages its international name while playing its known game in India. But India, being India, no foreign brand has had it easy here, especially in its early years. On the other hand, TaxiForSure, a home-grown brand, appears ready to explore international markets next year, starting with South-East Asia and West Asia.

“In India, you need a local approach to solving business problems. We have that advantage over Uber,” claims TaxiForSure’s Radhakrishna. “India, though high on smartphone and app usage, is still largely an India that also wants to phone for a ride and pay cash. We employ budget cars to enable more people to be able to use taxis,” Radhakrishna elaborates. Having just launched 100 of its Tata Nano taxis in Bangalore, Taxiforsure is endeavouring to make commutes as affordable as possible. Proving itself on home turf again and again will mean it may score in new markets as well. But despite the recent setback, one feels that Uber will get back into the game and put up a good fight.

However, all said and done, there’s a lesson for every cab rental brand from Uber’s experience in New Delhi. A common challenge now is that no brand can afford to slack off on the commuter’s safety. Better safe than sorry, or the sheen will wear off on an otherwise plum performance.

Published on December 25, 2014

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