Recently Uber haD expressed how troublesome it finds to do business in India, given so many licenses and permissions required for which one has to toil in and out of government offices. In the past Uber also hinted to go flexible in its approach in emerging markets and rightly so after introducing UberAuto , an auto ride booking service with payment in cash in New DELHI last month, now Uber has compromised on one of its key features of Uber rides, i.e., Cashless Rides and introduced Cash Payment for its taxi rides which must be selected prior to requesting a ride.
The new feature is in pilot mode in Hyderabad and is soon expected to be launched in other cities.
This is an experiment and a global first for Uber across our 300-plus cities. We have worked hard to create a seamless cash payment option that is truly Uber
Uber said while announcing the service as an experiment in Hyderabad to gain a deeper understanding of consumer behavior and usage trends to help develop more robust payment options for the local market. It further added,
Hyderabad was the only city specifically selected for this experiment because it provides us with the right environment to test a new payment option amongst a sizable and sophisticated rider and driver community.
The move is not surprising on Uber’s part which despite being the world’s leading taxi service valued at $40 Billion (expected to be $50 billion with latest funding) and presence in 300 cities all around the world, lags far behind Ola (valued at $400 million in latest funding), the leading cab service in India which accounts for about 80% of market share and presence in 110 cities with plans to reach 200 by the end of 2015.
Also, with the credit card users as low as 2% in India (about 20 million credit cards for a population of 1.3 billion) the cash payment mode is the sure shot way to open doors to millions of users who otherwise would not have used the service.
Tradition dictates that cash plays a big role for Indian consumers. As a data-driven technology company that has seen strong growth in India we feel this is the right time to explore the extent of this predisposition when it comes to our service,
Uber Hyderabad GM Siddharth Shanker said. Even, Amazon, the leading ecommerce company in the world introduced Cash On Delivery feature when it was launched in India to attract more customers.
Uber’s India Stint so Far
In India, Uber currently operates in 11 cities of India, which is one of the fastest growing markets due to its low rate of car ownership standing at about 24 cars per 1,000 people. Despite the regulatory hurdles and controversies Uber faced due to the infamous incident in December 2014, Uber has not backed down and is rapidly making efforts to expand its user base across the country.
Post that incident, it has rolled out its new SOS button to boost security which sends live GPS updates to local police, provides police with information on the driver, and sends details on the passenger reporting the issue, in addition to initiating a phone call with the police as it initiallydid. In addition to it, it also introduced the “Send Status” feature in India, which allows users to share details about their driver and route with up to five contacts in a move intended to increase accountability as well as increased the rigorous screening of drivers before employing them.
Despite the ban in Delhi, Uber acquired a Delhi-based company, renamed as Uber India Technology (UIT), to be at the centre of the firm’s operations in Delhi, where it is presently on a collision course with the city Government’s transport department, as reported by Business Standard.
It has also altered its MoA stating the vision and purpose of the firm, to suit the Radio Taxi Scheme, 2006, which governs the capital’s taxi business.
The San Francisco based company has also introduced many offers and referral schemes in its bid to attract users especially youth of India, offering a ‘double referral bonus’, where an existing user gets rides up to Rs 600 for on boarding every new member and the first ride for the new member is also free for up to Rs 600. It also slashed its fares about 40 % earlier this year, rolled out promotions such as discount helicopter rides, and is offering per-trip bonuses to drivers to encourage them to work for the US Company.
India is Uber’s largest market outside the US.