Uber to launch low
cost cab service exclusively for India
NEW DELHI: In a global
first, Uber Technologies will on Thursday launch low cost service UberGo
exclusively for the Indian market, its fastest-growing territory outside the
US, posing a threat to rival taxi aggregators such as OlaCabs and TaxiForSure.
The company said the service will be as cheap as travelling by autorickshaw.
UberGo will use hatchbacks for ferrying customers who will be charged Rs 40 as
base fare plus Rs 11-12 per km and Rs 1 per minute.
This is much less than
the base fare of Rs 75, Rs 2 per minute and per km rate of Rs 18 for premium
service UberBlack. It's also below the base fare of Rs 50, rs2 per minute and
Rs 15 per km tariff charged by UberX, which will now become its mid-range
service. The UberGo service will be offered in the 10 cities where the company
has operations and has been tailor made for India, which has a taxi market
estimated at as much as $9 billion.
"We're changing
the use case for taxis as we want people to use them for shorter distances. The
customer will pay the same fare as he does for an autorickshaw and in some
cases even less," said Gagan Bhatia, GM for Uber in Delhi.
"We're entering
the second phase of growth in India, which goes to show in our recent
announcements," said Bhatia. UberGo drivers will be given Huawei devices
for accessing customer pick-up requests. Over the past two weeks, Uber has tied
up with digital payment provider Paytm allowing users to pay via Internet
banking, debit cards and credit cards, to meet Reserve Bank of India payment
directives. It has also launched a vehicle financing programme for cab drivers
to own their cars.
"We're a very
locally run startup, so learnings from one market are shared with others and
implemented wherever required," Bhatia said, when asked whether the
service would be taken to markets outside India. With the new service, Uber
aims to strengthen its presence in the lower end of the taxi market. OlaCabs
has slashed prices for its Ola Mini service to Rs 10 per km while TaxiForSure
offers fares ranging from Rs 49 to Rs 63 for 4-5 km rides. OlaCabs recently launched
an autorickshaw service in Bengaluru.
"We're going to
do what it takes to make Uber an uber-quality experience and to invest in a
market (where) we're convinced of the opportunity," Allen Penn, head of
Asia operations, had told ET last week. "And we see that opportunity in India
as big as anywhere else in the world. You will continue to see us customise
products for local markets." Ola recently raised $210 million from Japan's
SoftBank and existing investors at a valuation of nearly $650 million while
Bengaluru-based TaxiFor-Sure is in talks to raise fresh capital of more than
$60 million after it raised $30 million in August. Uber may invest about $400
million in India.
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