Resuming of Ola and Uber operations will provide livelihood relief to drivers on the two platforms. However, reviving demand is likely to be a huge challenge for SoftBank-backed ride-hailing companies.
Cab hailing services Uber and Ola have expanded operations in more cities including few in the red zone. While Uber added Delhi, Mysore, Sonipat, Faridabad etc. under red zone taking the total number of cities it is operational in to 34, Ola expanded to more than 160 cities in states including Karnataka, Telangana, Delhi, Haryana, Chandigarh, Punjab, Tamil Nadu (except Chennai), Andhra Pradesh, Kerala, and Assam. Ola and Uber had suspended their services ever since the government imposed the lockdown on March 25. The services were resumed partially in green and orange zones on May 4 following the Ministry of Home Affairs (MHA) guidelines easing restrictions. The revised guidelines on Sunday gave a blanket approval to all the services except those that were specifically prohibited, as per the MHA order, including air travel, metro, educational institutes, hotels, restaurants, cinema halls, religious places etc.
“Ola services will be live tomorrow (Tuesday),” an Ola official confirmed Financial Express Online as the services remained suspended post announcement on Monday. Uber, on the other hand, resumed services with limited ride options such as UberXL (SUV rides), UberAuto and Lantern (compact rides) on its app. “As per the latest guidelines issued by various State Government today, driver-partners operating three and four-wheelers on the platform will be available to serve mobility needs on the Ola app, with the highest levels of safety precautions,” Ola said in a statement.
The rides were launched with continued safety precautions including using digital payments, masks usage by driver and passenger, sanitization of cars post every trip, allowing two passengers per ride etc. Moreover, drivers and passengers can cancel the trip if a lack of safety precautions is noticed.
“In compliance with Lockdown 4.0 guidelines by the Government, Uber is resuming services across more cities in India. Riders will constantly be notified with further information and the status of specific cities through our app,” Uber said in its blog.
Expanding services will also resume livelihood for drivers, on Ola and Uber platforms, who have been sitting idle amid lockdown restrictions on cab services. However, reviving demand is likely to be a huge challenge for Ola and Uber as customers may switch to personal vehicles due to hygiene concerns even as it may enhance sales of personal cars. According to an Ipsos report, “at least 40 per cent of purchase intenders said they are more likely to buy a new or a used car, after the coronavirus crisis and 31 per cent purchase intenders will have no change in purchase intention and are likely to purchase the same as before.”
“It is a big challenge for them to revive growth post-Covid as they know the demand may not come for a very long time. There could be a dent on business for six-nine months. There are also issues on the drivers’ end who are sitting idle at home due to lack of demand,” Sanchit Vir Gogia, Founder and CEO of consultancy firm Greyhound Research had told Financial Express Online.