Ride-hailing beyond 4-wheelers
Ride-hailing is still a relatively young transport service segment in India, as the first ride-hailing company Meru was founded in 2007 in the country. As of 2023, it has grown into a six billion U.S. dollar industry. This sector is dominated by two companies, indigenous Ola Cabs, and Uber. Ola was established in Delhi in 2009, first as a trip-planning company, expanding to provide on-demand taxi services in 2011. As of 2024, it is operating in more than 250 cities in India. Following close behind is Uber, which started its Indian operations in 2013.India’s MaaS market distinguishes itself from others through higher numbers of two- and three-wheeler rides in addition to cars and taxis, which should not come as a surprise, since auto rickshaws, traditionally, were the most popular type of taxi service in the country. Despite its popularity, one of the major complaints has been the frequency of drivers canceling their rides, especially during peak hours.
The challenges ahead
But it has not always been this way. The coronavirus pandemic in India brought the mobility services sector to a complete halt in mid-2020. After the travel restrictions were eased, the demand came roaring back. And since major companies, by then, had shifted their focus to profitability, drivers, while previously had no work at all, suddenly found themselves caught between increased fuel costs and higher commissions by the platforms.As a result, many experienced drivers left or joined both the major platforms which subsequently affected the quality of service, visibly deteriorating. In addition, the Indian government tightened regulations in the sector. Financial reports from both Uber India and Ola Cabs have shown significant losses in recent years. Even amid these challenges, several new companies, most visibly BluSmart Mobility, started providing all-electric ride-hailing services to explore new profit models in the market, forcing seasoned players to diversify as well.
