Boon or Bane!
Want to go somewhere? Hate public transport? Don't want to haggle prices? Simply tap on your smartphone and a genie will appear with a car! Convenient modes of payment, air-conditioned rides, and the feeling of being wee-bit more superior and sophisticated. Sounds familiar?! That's the radio cab services for you.
They entered the Indian market a few years ago and their immense popularity in the major cities cannot be more pronounced. Everyone with a basic smartphone has access to them. Be it referral amount, free rides, adhoc discounts or half the running km cost of Auto-rickshaws. These radio cab operators are doling out perks to attract more and more customers. I once had a word with a cab driver and they're paid anywhere between Rs. 18-25 per km. by the operators. And they charge us anywhere between "completely free" to Rs. 15 per km. Ever wondered how on earth are they making profit?
Yes! They're not. In fact they're making heavy losses. As per Economic times, Ola cabs recorded a staggering loss of 796 cr. in FY'15 alone. How are they still in business, you may ask?! They have the international funding and investments pouring in from venture capitalists. They'll continue to bleed because they smell opportunity. Bleed till the competition market of Auto-rickshaws is injured to a point of no return. Though they'll still exist, but their numbers would be depleted and revenues dried up.
Would like to quote a recent experience here. Earlier when I used to visit the city, I had to bargain with auto drivers, and still felt that I've been taken for a ride many times. Recently I just came out of the railway station and was immediately surrounded by auto-drivers. They were asking where I wanted to go, but most had a subtle underlying pleading tone. One of the auto drivers out of sheer frustration, ended up saying "Don't pay anything sir, I'd still drop you where you want to go."
Where and how do you think the cab operators will recover the massive losses? Yes! From us. The gradual rise in cab fares and eventual atrocious pricing of radio cabs will begin to rip-off customers. And they will have nowhere to go. Partly because they won't have many options. But majorly because they'd be addicted to the 'convenience'. Of being picked up from where they want, cab drivers never saying NO for any location, no matter how short or long the distance is. And needless to mention the comfortable ride.
How many customers will continue to pay more for better service? How well will the monetarily sensitive Indian middle class receive the price rise? What will be the resistance by Auto drivers against their own downfall? Is there a scope of government intervention in regulating prices of a legitimate private business set up? Only time will tell!
They entered the Indian market a few years ago and their immense popularity in the major cities cannot be more pronounced. Everyone with a basic smartphone has access to them. Be it referral amount, free rides, adhoc discounts or half the running km cost of Auto-rickshaws. These radio cab operators are doling out perks to attract more and more customers. I once had a word with a cab driver and they're paid anywhere between Rs. 18-25 per km. by the operators. And they charge us anywhere between "completely free" to Rs. 15 per km. Ever wondered how on earth are they making profit?
Yes! They're not. In fact they're making heavy losses. As per Economic times, Ola cabs recorded a staggering loss of 796 cr. in FY'15 alone. How are they still in business, you may ask?! They have the international funding and investments pouring in from venture capitalists. They'll continue to bleed because they smell opportunity. Bleed till the competition market of Auto-rickshaws is injured to a point of no return. Though they'll still exist, but their numbers would be depleted and revenues dried up.
Would like to quote a recent experience here. Earlier when I used to visit the city, I had to bargain with auto drivers, and still felt that I've been taken for a ride many times. Recently I just came out of the railway station and was immediately surrounded by auto-drivers. They were asking where I wanted to go, but most had a subtle underlying pleading tone. One of the auto drivers out of sheer frustration, ended up saying "Don't pay anything sir, I'd still drop you where you want to go."
Where and how do you think the cab operators will recover the massive losses? Yes! From us. The gradual rise in cab fares and eventual atrocious pricing of radio cabs will begin to rip-off customers. And they will have nowhere to go. Partly because they won't have many options. But majorly because they'd be addicted to the 'convenience'. Of being picked up from where they want, cab drivers never saying NO for any location, no matter how short or long the distance is. And needless to mention the comfortable ride.
How many customers will continue to pay more for better service? How well will the monetarily sensitive Indian middle class receive the price rise? What will be the resistance by Auto drivers against their own downfall? Is there a scope of government intervention in regulating prices of a legitimate private business set up? Only time will tell!
Quite informative and precisely written article. Keep it up!
ReplyDeleteThank you!
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