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How Uber plans to cover 200 cities by 2020-end

By Surajeet Das Gupta
December 25, 2019 12:03 IST
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The key driver of this expansion will be not car-hailing but bike-taxi service.

The company is willing to partner local players that have a similar offer and would like to come on their platform.

Uber India has finalised a four-fold expansion of its operations in the country from 52 cities to 200 by the end of next year.

The key driver of this expansion will be not car-hailing but bike-taxi service, which was launched in India in July this year.

 

Such service has been rolled out in 30 cities, doing over 150,000 trips a day, though it is not there in the big states of Maharashtra and Karnataka, where it is working through regulations.

Three-wheelers will be part of this drive. Elaborating on its strategy in India for next year, Pradeep Parameswaran, president of Uber India and South Asia, said: “Our move is to go from being in the premium AC-car business, which is based on the high end of the market, to what is now, where technology can play a dramatic role in the middle and the mass segment of the market.

"Earlier we did not have the products that were relevant for people outside cities.

"India does not move in cars, Indians move in two- and three-wheelers, and buses.”

While car-hiring service will be available in most of these cities, two-wheeler service will be there in all the cities if there is regulatory permission.

“Cars will be available in some shape, but the Uber value preposition will be based on our mass products, not on premium AC cars,” the president said.

The company is willing to partner local players that have a similar offer and would like to come on their platform.

The big part of the drive will be through three-wheelers. Launched in the middle of last year, Uber is doing more than 400,000 rides a day.

It might also launch intra-city bus service. However, a decision whether it is for next year has not been decided.

Speaking on the future of the car-hailing business, Parameswaran pointed out: “Growth in the car business has matured, and from the role it plays in our portfolio today, it is likely to be a driver of profitability.”

Responding to whether cars as part of ridership will become smaller, he said, based on the volume of trips (only intra-city), they constituted two of every three trips while in the beginning of the year it was five of every six trips.

The company sees a large opportunity in the non-AC car space.

Currently it is undertaking a pilot project with Bajaj Auto for Qute (quadricycle) with 100 vehicles, and plans are on to expand it to other markets too because the response from both the riders as well as the users has been encouraging.

Parameswaran said the bike opportunity was huge because there were more than 200 million two-wheelers in the country, which was the largest manufacturer of such vehicles.

He pointed out the size and potential of the market could be gauged from the fact that in Indonesia, Gojeck, a bike ride-hailing service, did over 20 million rides a week, though the country had 25 per cent of India’s population.

He said bike-taxi service made business sense because commuters used it for short trips of less than 20 minutes and distances were ideal for last-mile connectivity.

The driver can make Rs 10,000-15,000 a month and in many cases would have a bike, which he can put on the system.

On whether and when Uber India will make money, Parameswaram said: “We will be in investment mode and there will be a steady move towards profitability but there are no firm commitments of time.”

Photograph: Reuters

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Surajeet Das Gupta in New Delhi
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