Uber Technologies Inc. is a US-based transportation network company (a), mainly operating in cab hailing services. Launched in 2011, Uber has since expanded rapidly, currently operating in more than 800 cities worldwide. Uber officially entered India in 2013, launching its cab services in Bangalore.
Over the years, Uber has launched services in more than 30 Indian cities. In April 2015, Uber launched its auto services. This marked a big step forward in its attempt to capture a share of the Indian market.
Uber Auto: Combining tradition and technology
Auto rickshaws have been a major mobility option in Indian cities since a very long time. Estimates suggest that there are more than 2 million auto rickshaws plying on Indian roads.
In order to expand its transport options, Uber launched its auto services in 2015. With the launch of its auto services, Uber has made a big attempt to enter this large and untapped market.
By bringing this vastly popular transport option on to their platform, Uber has also managed to give a local flavour to their India business.
The Indian customer: Price conscious
Although Uber’s cab services are widely used in India, it is still considered expensive by a large section of the population. In a price sensitive market like India, customers still consider booking cabs as unnecessary expenditure.
This is due to the fact that much cheaper options, like buses and autos are readily available in cities. For example, for a 4 kilometer ride in Coimbatore, UberGo cab charges ₹100, while an auto would only cost half as much.
With a view to tap into this budget customer group, Uber introduced the Uber auto services in 2015. Uber was trying to catch up with competitor Ola, which had already introduced its auto services in Bangalore in 2014.
Launch and Re-launch:
Uber officially launched its auto services in early 2015. Uber rolled out the feature first in Delhi, Coimbatore, Indore and Bhubaneshwar. Delhi, with its estimated 1,50,000 autos, was the best option for Uber to test its latest offering.
Initially, Uber planned to bring auto rickshaws onto their platform and train them to be cab drivers with Uber after a brief training period.
However, due to the reluctance of auto drivers, Uber’s plans did not take off and Uber had to shut down its auto services after a period of 8 months.
Uber and Ola
Uber was absent from the auto rickshaw segment for the next two years. In the same period, Ola Auto was performing exceptionally well. Ola’s auto segment had become a big hit among customers on a budget.
By 2018, Ola had 1,20,000 autos on its platform and had completed 2 million rides. Seeing Ola’s success, Uber re-entered the auto rickshaw segment in early 2018. In January 2018, Uber launched its revamped auto services in Pune and Bangalore.
Following positive feedback, in March 2018, it re-launched Uber Auto in Delhi and Gurgaon. Uber Auto offers auto services at very affordable fares. In some cities, the fares are ₹25 for the first 4 kilometers.
After that, Uber charges ₹13 for every additional kilometer. The Uber auto service is available on its official app. After rapidly growth, Uber auto service is present in more than 20 cities at present.
Uber Auto: Benefits to all
Uber’s auto services are considered a win-win situation for all stakeholders involved. For Uber, it meant an entry into the large auto rickshaw market in India. For customers, auto services are a very affordable and viable option.
Since Uber autos reach customers right at their doorstep, a lot of hassling for an auto is avoided. With fares as low as ₹25 for 4 kilometers, autos are preferred for short distance travels. Uber’s autos are also much more reliable than traditional autos, due to fixed fares and safety features.
As far as auto rickshaw drivers are concerned, their association with Uber has ended their idle time, since Uber offers a steady supply of customers. This has increased their income substantially. Uber also offers incentives for good performance. Thus, auto drivers also feel more inclined to perform better.
Uber plans to bring 1,00,000 autos onto their platform and launch operations in more than 50 cities by 2020. Uber auto is a budget option for those wishing to travel short distances, and can be easily booked using the Uber official app.