Cab services in just 5 minutes, was not not only unheard of but also beyond imagination in Indian cities. Eyes blinks and yes it is here, touch and feel it you are no more deprived.
Having started its operation from financial capital Mumbai in 2011, Ola Cabs has caught the imagination of urban India faster than expected. Taking India for a ride and also competing with bigger global competitor Uber was not an easy task for the young founder duo of Ola. Today, Ola and Uber are two prominent name which has changed the landscape of local city travelling.
Players and Games in the market
The app based Cab services is some four years old in market however unlike other startups, this field is relatively less crowded. Majorly Uber , Ola and Taxi4Sure (acquired by Ola) play in this market. Despite being relatively new market there have been lot of fireworks in the field which gave the industry more eye balls than it could have ever gained through advertising. In fact, many people knew about Ola and Uber only when their services were barred in Delhi NCR ,one of the important market for Taxi aggregator services.
State Govt of Delhi had straight face off with App based Taxi services going to the extent of banning it, some voice also murmured about involvement of established players in the market to disrupt the growth of app based services which was on killing spree for Taxi companies like Meru, Easy cabs etc. App based Taxi service provider maintained that they are not the transport agencies but just an app for Taxi search. Good that the nascent players successfully crossed this hurdle which posed serious challenge on them.
Changing Lives
Surprisingly , app based Taxi services have changed the lifestyle and travelling habits in Metro Cities quite rapidly. They have not only dented the business of established players but more than that created new market segment. Availability of low cost traveling options have given wings to the class which now travels even to the offices by cab, this was quire unheard of earlier. The surge in demand has been so phenomenon that the demand started to outstrip the supply pushing app based companies to hire more drivers.
Fortunately, the excitement on the other side has also been quite encouraging. More and more drivers are today getting on board to Ola, Uber and Taxi4Sure leaving their traditional jobs. I happen to ask some of drivers about their backgrounds on my several trips and found out they are from all walks of life. Couple of them even were driving heavy vehicles while some other were seasonal drivers during holiday seasons in India. I found most drivers happy by connecting with these App Based services.
How they make money
While customers are getting the fare which they never imagined and drivers are getting commission and incentive beyond their expectations. Both the associate wonder big time where from money comes. Actually, none of them are making profit now or anytime soon. For Uber or Ola, the current focus is to expand the horizons - acquiring more customers, acquiring more drivers and expanding into more cities are the prime focus of all of them. Ola acquired Taxi 4 Sure in cash and Stock deal for $ 200 Millions by consolidating the position as well as keeping any serious competitors at bay for the time being in the booming cab services market.
Future of the Industry
Though, many of the traditional analyst have doubt about longevity of the business model or profitability however the industry does not seem to be looking back. For a country like India where there is low vehicular penetration and difficult driving scenario, the market condition seems encouraging. The probable challenge which this industry might face is cost competency as India is cost sensitive market and users will be more cost driven. So the churning out profit keeping both drivers and customers will be an uphill challenge in mass segment. The absence of third player in the market will give enough playing room to Ola and Uber to maneuver the industry in ideal way.
Having started its operation from financial capital Mumbai in 2011, Ola Cabs has caught the imagination of urban India faster than expected. Taking India for a ride and also competing with bigger global competitor Uber was not an easy task for the young founder duo of Ola. Today, Ola and Uber are two prominent name which has changed the landscape of local city travelling.
Players and Games in the market
The app based Cab services is some four years old in market however unlike other startups, this field is relatively less crowded. Majorly Uber , Ola and Taxi4Sure (acquired by Ola) play in this market. Despite being relatively new market there have been lot of fireworks in the field which gave the industry more eye balls than it could have ever gained through advertising. In fact, many people knew about Ola and Uber only when their services were barred in Delhi NCR ,one of the important market for Taxi aggregator services.
State Govt of Delhi had straight face off with App based Taxi services going to the extent of banning it, some voice also murmured about involvement of established players in the market to disrupt the growth of app based services which was on killing spree for Taxi companies like Meru, Easy cabs etc. App based Taxi service provider maintained that they are not the transport agencies but just an app for Taxi search. Good that the nascent players successfully crossed this hurdle which posed serious challenge on them.
Changing Lives
Surprisingly , app based Taxi services have changed the lifestyle and travelling habits in Metro Cities quite rapidly. They have not only dented the business of established players but more than that created new market segment. Availability of low cost traveling options have given wings to the class which now travels even to the offices by cab, this was quire unheard of earlier. The surge in demand has been so phenomenon that the demand started to outstrip the supply pushing app based companies to hire more drivers.
Fortunately, the excitement on the other side has also been quite encouraging. More and more drivers are today getting on board to Ola, Uber and Taxi4Sure leaving their traditional jobs. I happen to ask some of drivers about their backgrounds on my several trips and found out they are from all walks of life. Couple of them even were driving heavy vehicles while some other were seasonal drivers during holiday seasons in India. I found most drivers happy by connecting with these App Based services.
How they make money
While customers are getting the fare which they never imagined and drivers are getting commission and incentive beyond their expectations. Both the associate wonder big time where from money comes. Actually, none of them are making profit now or anytime soon. For Uber or Ola, the current focus is to expand the horizons - acquiring more customers, acquiring more drivers and expanding into more cities are the prime focus of all of them. Ola acquired Taxi 4 Sure in cash and Stock deal for $ 200 Millions by consolidating the position as well as keeping any serious competitors at bay for the time being in the booming cab services market.
Future of the Industry
Though, many of the traditional analyst have doubt about longevity of the business model or profitability however the industry does not seem to be looking back. For a country like India where there is low vehicular penetration and difficult driving scenario, the market condition seems encouraging. The probable challenge which this industry might face is cost competency as India is cost sensitive market and users will be more cost driven. So the churning out profit keeping both drivers and customers will be an uphill challenge in mass segment. The absence of third player in the market will give enough playing room to Ola and Uber to maneuver the industry in ideal way.
