Here’s how you benefit from Uber, Ola cabs slug fest

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Bangalore | Updated: June 18, 2016 7:57:35 AM

Earlier this week, Uber brought down fares for its budget category UberGo to R6 per km in New Delhi to match Ola

uber cab, ola cabsThe online cab aggregator market in India, faced with fierce competition between the two main players Ola and Uber, is likely to see aggressive price cuts. (Reuters)

The online cab aggregator market in India, faced with fierce competition between the two main players Ola and Uber, is likely to see aggressive price cuts.

Earlier this week, Uber brought down the fares for its budget category UberGo to Rs 6 per kilometres in New Delhi to match Ola. However, it is not clear if Uber would replicate this price cut across other cities. Uber refused to comment on this story.

Ola fired the first salvo by unleashing a budget category called Ola Micro in February at Rs 6 per kilometre. This pricing is uniform across the country. According to RedSeer Consulting, 80% of the bookings for Ola now comes through its budget segment comprising Micro and Mini. It also said that Uber had lost about 5% of the market share since the launch of Ola Micro.

Uber has also rolled out various weekly discount offers for customers. Like in Chandigarh, if a users takes 5 rides a week, the company offers 25% discount on the subsequent ride. However, the fares of budget offering UberGo are not uniform across the country. For example, in Mumbai it is priced at Rs 8 per kilometre while it is Rs 7 in Bengaluru.

Besides this budget portfolio, the fares in the premium category for both Ola and Uber also differ across cities. On an average, UberX’s fares are in the R8-10 per kilometre range while for Ola Prime it starts at R10 and goes all the way to Rs 13.

In May last year, Ola had about 1.6 lakh cabs attached to its platform. In a year’s time it has more than doubled the number and has about 3.5 lakh cabs now across 102 cities. Similar is the case with Uber which had about 1.2 lakh vehicles in May last year. At present it has about 2.5 lakh vehicles on its platform.

Uber recently announced that it has raised $3.5 billion from Saudi Arabia’s Public Investment Fund, and that a substantial portion from this would be allocated for India operations. Flush with funds, the price war is only likely to intensify in the coming days.

The companies have also been at loggerheads with the governments in Delhi and Karnataka over the issue of surge pricing, wherein, both the players have been asked to put a cap on it.

The India’s online taxi services market is estimated to grow at a CAGR of over 17% during 2015-2020, according to Research and Markets, a US-based market research firm.

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