If indeed there is one sector that has been truly disrupted in recent times, it has to be urban transportation since app-based aggregators Ola Cabs and the international Godzilla Uber hit the road running. It’s been one hell of a joy ride for commuters in metros such as Mumbai, Delhi, and Bengaluru, and to some extent in tier II towns as well, as for once they were not at the mercy of unionised cab drivers.
Not only are drivers today at your beck and call but fares, too, have only headed one way — down south. Thanks, of course, to aggressive competition between Ola and Uber, a benign crude price, and most importantly, cheap money. What was once an organised cab market of $300 million in 2012 is today a $1.2 billion business of micros, minis and shares.
In the race to gain market share, the fancy incentives doled out by the two aggregators got a whole new breed of drivers, car owners, and fresh graduates opting to be “entrepreneurs.” But as the fleet kept bloating, and customers got used to lower tariffs, the incentive structures cost the aggregators dearly. The dreams of cab drivers soon turned out to be nightmares as a result.
The economics of commuting, for now, is in complete disarray and what’s in store is what this issue’s cover story is all about. Ola is crying foul by terming Uber’s clout as “capital dump” but cabbies are accusing the same of Ola, not in the same sophisticated terms though. How long the distortion will last depends on whose coffers will run dry first. Till the day some investor decides that the P&L can no longer bleed, the joyride will continue for commuters.
The other features in the issue include a profile of the country’s first microfinance player to have turned into a universal bank, and how a whole host of home-grown start-ups are bringing the power of artificial intelligence to our homes and workplaces.