By Vyshak Simha
Evolution of India’s taxi service landscape with the advent of app-based ride-hailing services
Nearly a decade ago, app-based ride-hailing services disrupted India’s taxi service landscape, introducing a revolutionary shift in the transportation industry. Estimates suggest that the revenue in the ride-hailing market in India is projected to reach $6.42bn in 2023, demonstrating an annual growth rate of 2.77%, resulting in a projected market volume of $7.36bn by 2028.
As the Indian ride-hailing market continues to formalize, various diverse business models in the domain are also evolving. While commission-based models have traditionally steered the industry forward, emerging models could potentially draw valuable lessons from the experiences of the status quo.
In this regard, by aligning their products with the best interests of both – drivers and passengers, innovative approaches have the potential to reshape the landscape, and pave the way for a more inclusive and mutually beneficial cab ecosystem.
A closer look at the challenges associated with the existent app-based ride-hailing services
While the advent of ride-hailing platforms has streamlined and simplified the process of connecting drivers with passengers, the commission fees levied by service providers often leave drivers with a significantly reduced income. In such a scenario, it becomes imperative to explore alternative models that can potentially empower the drivers – by minimizing, or altogether eliminating such commissions. Such a model would not only allow drivers to retain a higher percentage of their earnings – but can also help build a greater sense of financial stability, and job satisfaction. Such a shift would not only benefit individual drivers but also could be seen as contributing to the overall welfare of a community – a community that indeed, forms, the backbone of the transportation sector at present.
On the flip side, while the app-based ride-hailing services have helped people get around and out of town without the stress of owning a car, customers have also grown more apprehensive about surge pricing, a practice that has become synonymous with peak hours or high demand.
Here, it becomes important to realize that while surge pricing may be a necessary evil to balance supply and demand, it is imperative to strike a balance that does not unduly burden the customers. In such a scenario, introducing a sense of transparency in pricing and measures to cap surge pricing during peak hours could be a positive step forward in fostering trust between the service providers and consumers.
Way forward
In recognition of these twin challenges, the Competition Commission of India also highlighted last year that there is a need to formulate a clear and transparent policy on surge pricing and dissemination of the same to both passengers and drivers, including adequate transparency with respect to the sharing of revenue on account of surge between the drivers and the aggregators.
Further, at this juncture, it is imperative for the industry to prioritise the safety and well-being of both, the drivers, as well as the passengers. This may involve implementing initiatives such as investing in advanced safety features, conducting thorough background checks, and establishing effective customer support systems. By building a foundation of trust and reliability, the app-based taxi industry can create an environment where everyone feels secure.
Thus, as we look towards redefining the cab market in India, we must realize that the responsibility lies with all of us – the industry leaders, regulators, and technological innovators to collectively chart a course that addresses the concerns of both drivers and passengers. By creating an atmosphere that prioritizes openness, innovation, and fairness, we should all try to ensure that the forthcoming stage of India’s cab market evolution is characterized by principles of empowerment, trust, and shared prosperity.
The journey, however, is ongoing, and it is now the moment to redefine the path ahead for all stakeholders involved.
The author is the CEO of viaDOTS, a ride-hailing SaaS platform.
Disclaimer: The views and opinions expressed in this article are solely those of the original author. These views and opinions do not represent those of The Indian Express Group or its employees.
