Government’s new app-based taxi service to take on Ola & Uber could offer these benefits

Nitin Gadkari, Minister of Road Transport and Highways hinted that government is working on introducing mobile app based taxi services which will increase the employment opportunity and will also support small/medium scale cab providers.

By: | Updated: July 26, 2017 1:32 PM

Mobile app based cab service has seen a double digit growth over last two years and looks like government of India might be the next new player to take on the likes of Ola and Uber. Seeing a big opportunity to increase employment and support small/medium scale cab operators’ government of India is planning to introduce a taxi-booking app, Minister of Road Transport and Highways Nitin Gadkari said on Monday.  He also added that “this idea to introduce app based cab services is still at primary stage but we are working on it seriously”. If the reports are to be believed then this plan will allow commuters to choose the mode of travel and will include two-wheelers taxis and electric four-wheelers.  “The government platform will help get more people employment opportunities,” Nitin Gadkari, India’s minister for road transport and highways, was reported as saying by the Economic Times newspaper. The ride-hailing market in India has generated over $10 billion. The ministry is also trying to implement a new law which seeks to bring taxi aggregators under Motor Vehicles Act. If implemented, then every taxi provider company including the ones owned by various state governments will have to follow the guidelines fixed by the government while issuing licenses to operate.

While more details on this are awaited, we do believe that this will increase the safety aspects while commuting. The Indian auto-industry will be benefited by this move as the pan-India roll out of app-based taxis will eventually result in increase in monthly sales of vehicles specially cars as the employment goes up. However, profit margins to the drivers and ease to get loans to buy the vehicles will play a crucial role for this idea to be successful.

Various state governments have already tried to enter the ride-sharing market by introducing various mobile applications. Delhi government had launched the PoochO driver app in 2015 which allowed the commuters to book taxi and auto-rickshaw in Delhi/NCR. Many former Ola and Uber drivers in Karnataka had approached state’s ex-Chief Minister HD Kumaraswamy, who then launched HDK cabs. Mumbai’s local kaali-peli taxi’s drivers also went on to launch Aamchi Driver mobile app to rival the likes of Ola and Uber.

Get live Stock Prices from BSE and NSE and latest NAV, portfolio of Mutual Funds, calculate your tax by Income Tax Calculator, know market’s Top Gainers, Top Losers & Best Equity Funds. Like us on Facebook and follow us on Twitter.

FinancialExpress_1x1_Imp_Desktop