This post has been updated.
Six years into their fierce rivalry in India, call-taxi majors Ola and Uber are still trying out various routes to seek dominance in the $10 billion market.
Over the past year, Ola, the Bengaluru-based unicorn, has sought to take the fight abroad. In January 2018, the Softbank-backed company made its first overseas foray to Australia, and by the end of the year, it had entered the UK and New Zealand as well. In October 2018, Ola also raised $400 million (Rs2,843 crore), which news reports said was part of a $2 billion mega funding that it was putting together.
However, Uber’s not been a mute spectator during this time, though the San Fransico-based firm’s chosen to work more behind the scenes to build a strong base for the future.
While the efficacy of their varying strategies in India is yet to be ascertained—neither has profitability on the radar for now—the paths they have taken are interesting in themselves.
When Uber entered India in 2013, Ola already had a three-year head start. And over the years, Uber has faced a slew of adversities from sexual assault allegations against drivers to homegrown startups playing the nationalism card, calling for protectionist laws.
However, it has played catch up successfully.
As per the latest data, Uber is a clear winner among Indian drivers. The number of Uber’s driver app installs are way higher than Ola now, which could prove to be a massive advantage for the US firm in the long run.
“The taxi industry is all about availability. If more drivers go to Uber than to Ola, it shows you drivers trust Uber more, and Ola should worry about that,” said Aman Kumar, chief business officer at market research firm Kalagato.
The Operator App is a standalone app for Ola operators—entrepreneurs on the platform who own more than one car to manage and track their cars, drivers and earnings straight from their phones, Ola told Quartz. This is not an indication of the million-plus drivers on Ola’s platform.
Both ride-hailing giants—Uber and Ola—are largely undifferentiated in their offerings so “there is very little to choose from and now the important thing is from the supply side (drivers, cars) than demand,” said Yugal Joshi, vice-president at Texas-based advisory Everest Group.
While Ola is making big headlines with its global expansion and acquisitions, Uber has been firming up its technological backbone, experts said.
For instance, the company has been aggressively ramping up its technology team in India. In December, Uber said, it will double the size of its tech teams across Bengaluru and Hyderabad. At the time, the company had 500 engineers working in the two teams. “We see immense potential in India’s tech talent and have been expanding our India tech presence since the start of this year,” Apurva Dalal, head of engineering, Uber India, said in a press release on Dec. 08, last year. “In 2018, our tech teams grew by 150% and we are focused on doubling down again in 2019.”
Besides, Uber has also brought some of its global offerings to India and used innovation to solve problems that are specific to this country.
On Jan. 30, UberBOAT was launched in Mumbai for short trips from the Gateway of India jetty to Alibaug and other islands around—its first major announcement in India in months. And in June 2018, Uber launched a pared-down version of its app, Uber Lite, in the country that struggles with poor internet speeds.
In some cases, the efforts seem to be minor but could benefit in the long run. “For example, Uber launched UberAssist in India for differently-abled passengers. Not that this will move the revenue needle for it, but it still indicates a willingness to innovate,” Everest Group’s Joshi said.
Among the customers who do use Uber, they are more likely to recommend it to others than Ola’s customer base is. Uber’s payment terms and general quality of customers is better, experts told Quartz.
The US-based company has also repeatedly said that India is a priority for it. In February 2018, CEO Dara Khoshrowshahi said Uber plans to grow its presence manifold in India. Then, in September, COO Barney Harford reiterated the firm’s intentions of doubling down on India-focussed investment.
But Ola is certainly not losing out on all fronts.
A numbers game for Ola
The $4.3 billion Ola operates in nearly 125 Indian cities, offering cabs, auto rickshaws, and even two-wheelers. And that is one metric that puts it far ahead of Uber, whose services are available only in just 36 cities.
That explains the wide gap between the share of Indian smartphone holders using the two apps.
For months now, Ola has been ahead of Uber in terms of the number of times their apps have been installed in India. However, app installs don’t necessarily indicate customer preference. Ola’s presence in more cities is likely what’s giving it an edge, experts say.
However, more than 80% of Ola’s business comes from its top metro cities, so the data may indeed signal customers favouring the app.
Uber’s scarce presence manifests itself in another metric—the uninstall rates.
It’s possible that the number of devices that used to have the Uber app and now no longer do is higher because at times, people would have downloaded the app to realise that Uber isn’t available in their region.
Going forward, both Uber and Ola will each continue to innovate and deliver a wide array of services, experts believe. These could include launching multiple modes of transport and the push in the food-delivery sector, among other things.
But despite the efforts on all fronts, regulatory hurdles could rear their heads soon.
“There is increasing noise that these aggregators have made transport problems worse in places where there is meaningful public transport. Though Indian cities lack public transport in general, still these aggregators are making the transport scene messier,” said Joshi, speaking about how little taxi services help India’s congestion and pollution problem. “Most cars take one or two passengers and occupy large space despite crowd on the Indian roads. Therefore, the public agencies at some point may start putting transport penalty tax on such aggregators which may further damage the market.”