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Low demand dents Ola, Uber's plans for parking space at rail stations

April 24, 2019 20:44 IST

The investments by Uber and Ola included setting up kiosks, incentivising drivers for parking at the railway stations, and payments to the Indian Railways.

Illustration: Uttam Ghosh/Rediff.com

After spending nearly Rs 100 crore each in setting up parking spots and kiosks at railway stations, Uber and Ola appear to be developing cold feet on expanding this service.

According to sources, both cab aggregators are going slow in acquiring additional parking rights as they believe their return on investment has not been high.

 

Also, cab drivers do not prefer to park their vehicles and wait for customers; instead they believe in staying mobile to find passengers.

Both Uber and Ola did not comment on a questionnaire sent to them on this issue.

Cab aggregators had already taken up space at various stations, including Mumbai Central, New Delhi and Bengaluru.

It had brought in around Rs 20 crore to the railway exchequer in 2018-19.

“The companies are of the view that it is not making economic sense to them and hence are not going ahead with expansion of services to more stations.

"Unlike airports, railway stations are located at the centre of the city and only limited parking spaces are available in their premises,” said a source.

According to sources in the two firms, a host of drivers working for them have protested against parking at railway stations.

“They claim that once they enter a railway station, they get stuck there for hours; they could have utilised that time to find new rides.

"They prefer staying on the move and picking up customers as and when a ride request comes from the railway station,” said senior operations manager at one of these cab majors.

The investments by Uber and Ola included setting up kiosks, incentivising drivers for parking at the railway stations, and payments to the Indian Railways.

While initially both these players had expected to find many takers at the railway stations, the demand has not been that high.

“People at railway station still prefer prepaid auto-rickshaws and even pre-paid taxis.

"Also at times, it is difficult for them to locate an Uber or an Ola cab.

"Many do not like lugging luggages while locating a taxi.

"That is why they prefer a prepaid taxi or autorickshaw which are parked much closer to the main exit of a railway station,” he added.

Based on the contracts with the Indian Railways, companies were allotted a demarcated area, duly fenced and leveled by the licensee, with a booth for the operation of parking stand and a fixed license fee.

In major stations, however, permission for parking more than 10 taxies at a time was not given.

During 2018-19, the railways’ sundry revenue was seen at Rs  9,800 crore, of which around Rs 330 crore was coming from the non-fare revenue, including the cab parking business. During 2017-18, the non-fare revenue of railways, categorised as sundry, was around Rs 7,500 crore.

Shine Jacob & Karan Choudhury in New Delhi / Bengaluru
Source: source
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