Road to recovery

Ride-hailing apps see demand as consumers opt for safer commute

Among the new users flocking to ride-hailing services in the past six months, 20% have migrated from public transport.
Among the new users flocking to ride-hailing services in the past six months, 20% have migrated from public transport.

The ride-hailing sector has picked up momentum. According to RedSeer data released in May this year, the market, consisting mainly of Ola, Uber and Rapido, saw 69% recovery in demand compared to the pre-Covid period. Overall, these companies clocked 78 million rides in March 2021; in January 2020, this number was 113 million.

As the fear of contracting the virus still looms large, autos — because of their affordability and safety aspects — are recovering faster than cabs and bike taxis, and registered 25 million rides in March 2021, according to RedSeer. The market share of autos increased from 23% in Q1 CY20 to 32% in Q1 CY21, while that of cabs shrunk — from 59% to 51% — during the same period.

In the fast lane

Rapido claims that its business bounced back shortly after the second wave subsided. Aravind Sanka, co-founder, Rapido, says that the company’s target group has changed during the pandemic, due to the work-from-home routine and the closure of colleges across the country. “Currently, the market is witnessing a trend of users moving from public transport to ride-hailing services, which are safer alternatives, and especially to autos and two-wheelers due to their affordability.” Rapido has launched two marketing campaigns to promote its services with a focus on the metros.

Uber, too, has seen its business recover across India. “On the back of increasing rider demand for low-cost products such as autos and two-wheelers, our goal is to increase safety and revive the economy,” says a spokesperson from Uber. In March this year, Uber provided Rs 10 crore worth of free rides to help people travel to and from their nearest vaccination centres.

Carpooling app Sride launched the Sneighbour feature on its app to allow members of its hyper-local community to help each other during the second wave of the pandemic. Lakshna Chadha Jha, CEO and co-founder, Sride, says this feature helped the company “gain traction and increase user activity, with more than 8,000 app downloads since its launch in April 2021.” In addition to its presence in the metros, Sride is focussing on expanding in Gurugram and Kochi in the coming months.

The long road

Among the new users flocking to ride-hailing services in the past six months, 20% have migrated from public transport, says Ankur Pahwa, partner, EY. Despite the relatively high prices, “safety is important for people now”, he adds.

A crucial factor that helped these companies get back on track quickly was the availability of drivers. During the lockdown, some of them engaged their drivers in B2B last-mile delivery for food aggregators like Swiggy and Zomato. “These partnerships were done to utilise the assets and driver capacities better and keep them engaged,” adds Pahwa.

Despite being an asset-intensive market, ride-hailing is slated to see high growth, analysts say. With roads getting more congested and car ownership declining, Pahwa says, ride-hailing stands to gain in the coming years.

Several new players have entered this space. Take, for instance, Prakriti E-Mobility’s Evera Cabs, an EV ride-hailing company started in 2019, and Whide, a shared mobility start-up launched in July 2021. Apart from ensuring business sustainability, these new entrants have to jostle with the bigger players. Rajeev Singh, partner, automotive leader, Deloitte Consulting, says, only those companies that enable people to travel in a cost-efficient manner via a hassle-free process, keeping their safety in mind, are the ones that will grow faster.

Further, the arrival of electric vehicles could change the game. “The operational expenditure and economics may change drastically, as fuel plays a huge role in this market,” Pahwa notes.

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