 "Ola, Uber readying for regulated business")
When the policy changes in the Motor Vehicle Act were announced to include taxi aggregators like Ola and Uber, both companies were prepared, according to people in the know.
Ola hired executives from the corporate affairs team of a top e-commerce firm to be in line with current and future laws, said a source at the Bengaluru-based taxi aggregator. Uber, internationally, has a team in place to liaison with the government and has made similar appointments as part of its India operations.
The US-based Uber earlier this year set up a global public policy advisory board to address regulatory concerns the company faced in many parts of the world. It appointed an Indian, Adil Zainulbhai, chairman of the Quality Council of India and former chairman of McKinsey India, to the eight-member board.
The companies could not be contacted for their comments on the matter. Even before the rule abolishing surge pricing came into effect in Bengaluru, Ola had started clamping down on it. “Ola expects the cap on the surge pricing to be Rs 14 on the base fare in its cheaper variants. An algorithm does not let it rise above that,” said an executive who is no longer with the company. Ola is waiting for word from the government before capping surge pricing in its expensive variants. “The team has also been convincing drivers to switch to CNG since most of taxis run on diesel,” said the executive. There have been indications from the government that it will ask all taxi drivers to switch out of diesel cars. Several executives that Business Standard spoke to said Uber had been preparing for a physical meter. The app does not show a surge pricing lighting mark anymore. The eventual fare is calculated and shown. “This is Uber preparing for meters and upfront fares. The government, for some reason, does not like the concept of GPS governing fares,” the executive said. Ola, however, has been pushing against the physical meters concept.
The two companies are not keen on the eventuality of surge pricing being abolished, as it works against their business model. Surge pricing attracts drivers to locations where demand is high and supply low.
“There is already technology in place that will tell drivers where demand has spiked and encourage them to go to those areas,” said an executive. Surge pricing also helps Ola and Uber cut down on the incentives to keep drivers on the app. It may cause a rethink on the incentive system as well. “The incentive system is not going to stay in place for long,” the executive said. “It is until the companies think they have sufficient control over the market.”
India’s taxi-hailing market is estimated at Rs 6,600-7,900 crore in annualised gross booking value as of February 2016, according to RedSeer Management Consulting, a research and advisory firm that tracks online businesses in India.
Ola hired executives from the corporate affairs team of a top e-commerce firm to be in line with current and future laws, said a source at the Bengaluru-based taxi aggregator. Uber, internationally, has a team in place to liaison with the government and has made similar appointments as part of its India operations.
The US-based Uber earlier this year set up a global public policy advisory board to address regulatory concerns the company faced in many parts of the world. It appointed an Indian, Adil Zainulbhai, chairman of the Quality Council of India and former chairman of McKinsey India, to the eight-member board.
The companies could not be contacted for their comments on the matter. Even before the rule abolishing surge pricing came into effect in Bengaluru, Ola had started clamping down on it. “Ola expects the cap on the surge pricing to be Rs 14 on the base fare in its cheaper variants. An algorithm does not let it rise above that,” said an executive who is no longer with the company. Ola is waiting for word from the government before capping surge pricing in its expensive variants. “The team has also been convincing drivers to switch to CNG since most of taxis run on diesel,” said the executive. There have been indications from the government that it will ask all taxi drivers to switch out of diesel cars. Several executives that Business Standard spoke to said Uber had been preparing for a physical meter. The app does not show a surge pricing lighting mark anymore. The eventual fare is calculated and shown. “This is Uber preparing for meters and upfront fares. The government, for some reason, does not like the concept of GPS governing fares,” the executive said. Ola, however, has been pushing against the physical meters concept.
The two companies are not keen on the eventuality of surge pricing being abolished, as it works against their business model. Surge pricing attracts drivers to locations where demand is high and supply low.
“There is already technology in place that will tell drivers where demand has spiked and encourage them to go to those areas,” said an executive. Surge pricing also helps Ola and Uber cut down on the incentives to keep drivers on the app. It may cause a rethink on the incentive system as well. “The incentive system is not going to stay in place for long,” the executive said. “It is until the companies think they have sufficient control over the market.”
India’s taxi-hailing market is estimated at Rs 6,600-7,900 crore in annualised gross booking value as of February 2016, according to RedSeer Management Consulting, a research and advisory firm that tracks online businesses in India.