QZ&A

“Our technology is better than any local competitor,” says Uber India president. Is Ola listening?

Quartz india
Quartz india

In early 2015, Amit Jain was on a holiday in India with his wife when he was offered a job to head Uber’s India operations. By then, the IIT-Delhi alumnus had spent 17 years in the US working at companies such as Rent.com, Deloitte, McKinsey, and TPG Capital.

Leading Uber in India was going to be tough as the company was battling massive negative press after one of its drivers allegedly raped a passenger in Delhi. It was panned for the fact that there was no senior official in India to act on the matter. The Delhi government banned the Uber app and many other cities were reported to follow suit.

Yet, Jain had no second thoughts. A regular Uber user in the US, he was already a fan.

On May 31, 2015, the company announced Jain’s appointment as its president for India.

Over the next 15 months, Jain expanded Uber’s India team from just 50 to 400 persons. It currently operates across 28 Indian cities and has over 400,000 drivers on its platform.

But not everything is working in its favour even now. Regulatory hurdles remain; Uber is fighting two lawsuits in Karnataka and New Delhi. Besides, it is fiercely competing with local rival Ola, which now has a presence in 102 cities.

As Uber completes three years in India, Jain spoke to Quartz about his experience and plans. Edited excerpts:

What convinced you to head Uber India at a time when the company was facing such a rough time?

I actually had no plans of moving to India at the time. But when the opportunity came up, it was a no-brainer for me. The company has caused transformation for riders and drivers in several countries. It was witnessing exponential growth, which was completely different from what I had seen at every company I had worked with in the past.

From a rider’s perspective, I started using Uber in India even before I had any conversation with the company.

Amit Jain, president, Uber India.
Amit Jain, president, Uber India. (Uber)

What was Uber founder Travis Kalanick’s brief when you came on board?

Travis has a vision for Uber which is, transportation as reliable as running water everywhere for everyone. So his brief to me was “that’s the vision, let’s make it happen.”

What are the advantages and disadvantages Uber has in India compared to the other 75 countries that it operates in?

The opportunity in India is absolutely enormous because the country has the second-largest population in the world. The other big difference in India compared with other countries is its regulations and regulators. Our space is just five-to-six years old and regulations for transportation were written way before. In India, we fall under the Motor Vehicles Act of 1988.

How much of your time goes in dealing with regulatory challenges?

Regulations have to change. As of now, there are no regulations directly governing our space, but in the future, there will be. So we are in the transition space.

How does it feel to be called a “foreign company” competing against an “indigenous startup”?

Being a part of a multinational company has several advantages. Firstly, a lot of investment has gone into our technology and product. We have got a backbone that works across 75 countries and 450 cities. We strongly believe that our technology is better than any local competitor across the world. Secondly, we get a lot of learning from other countries to India.

You compete fiercely with Ola. Do you think you will ever be able to make money?

Absolutely. We have gone through investment phases in other parts of the world as well. There was a time when we were in an investment phase in the US; today we are profitable there. We know how to take cities to profitability. Where we are in the India journey is where we were in the US several years back. Obviously, we will get to profitability.

In India, customers are very price sensitive and car ownership is a status symbol. What is your India strategy?

For customer loyalty, there are two elements: how can you offer the best service and experience possible, and how can you operate at the cheapest rate possible.

But how long can you offer the cheapest experience?

You can offer the cheapest service for as long as you can utilise your cars better than some other company. If a private car is being utilised 5%, a kaali-peeli taxi is being utilised 15%, and your car is being utilised 60%, it means your car is earning more money.

How long can you and your peers continue to subsidise drivers and customers?

Subsidising and discounting in any industry happens to grow the market. It’s not something that will go on forever. Eventually, you have to make money on a per-unit level.

But do you think car ownership will go down in India?

Our objective is to make sure that you don’t need a car. For most people, a car is the second-most expensive thing they buy, after a house. And they utilise it less than 5%. You are spending a lot of money on a depreciating asset that you use for less than 5%. Do you really need it?

Do you think India’s automobile industry has woken up to realise the threat that ride-hailing apps pose?

It’s been about five months now that Mahindra Group chairman Anand Mahindra said that you will see a shift in terms of the private car market, and you will see Uber-isation. So, I think awareness is certainly there.

What’s your take on reports which have said that since Uber has now exited China, more investment will come to India?

There will certainly be a reallocation of resources and money. We were spending $1 billion per year in China, so we will see a portion of that money being redirected to India as well as other markets. Also, we had a team of over 150 product and engineering professionals dedicated solely to China. We will see a lot of those people being dedicated to India and other growing markets.

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