Desperate times call for desperate measures. Well, almost this way for Uber in India.
Uber’s statistics in India have been very promising lately. According to Uber India’s official website, around a million drivers used the platform in 2023, and this number is only growing today.
Furthermore, 84 percent of Indians say they prefer using Uber over other transportation methods. To get a deeper perspective on Uber India, visit this link.
Going back, Uber India’s revenue has only grown this year, significantly compared to last year.
So, for institutions to ask the platform to let go of its market in India is a big no-no for Uber.
The result: Uber has waged a price war. Not a trade war but a price war.
Price war
Google defines a price war as “a fierce competition in which retailers cut prices in an attempt to increase their share of the market.”
Last February, the Silicon Valley giant let go not of its Indian market but instead of its commission-based pricing for two- and three-wheeler segments, allowing drivers to pay as little as $0.10 for a daily subscription.
Will this pull the market closer to Uber? Of course.
Spokespeople from Uber stated that this was due to the activities of the rivals who have adopted somewhat a similar strategy to remain competitive. However, the Uber representatives chose not to comment on whether Uber would duplicate its commission-free policy for cabs. From the perspective of the cabs, Uber has slashed fares by 40 percent to retain its customer base. Too fast, so the cabs felt they were overpowered.
Repercussion
While this is definitely good for business, this can lead to policy changes and reforms in the transport sector.
Experts told the media how this shift can affect the movement of ride-hailing economics not only across India but around the globe. They warned that escalating price wars could worsen the conditions of drivers.
“Any uptick in growth, particularly in offering different platforms with varying attributes, is an interesting development for a large market like India,” they stated. “This can lead to changes in the policy regulations and reforms in the Indian transport sector. If that happens, there will be a lot to learn from the Indian market.”
Drivers are not liking it
The experts are pointing out that this price war may be favorable for Uber but not for the drivers.
Presently, there is driver resentment toward the commission-based pricing and the changes, and interestingly, this has existed for so many years.
Drivers don’t want this. Instead, they want “trust and transparency in payments.” Experts say these drivers feel they are being “deceived by commission models where algorithms set rates during peak hours.”
Uber, believe it or not, has clocked in three billion rides in the last decade in India, making an average of 800,000 trips daily.
Here’s the landscape now: the competition in the commission-free ride-hailing industry is only increasing.
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