Uber's withdrawal raises doubts about rickshaw ride apps in India

Ola and Uber have not been able to scale their auto-rickshaw service, due to problems related to customer adoption, reports Tech in Asia

Uber’s quiet withdrawal of its auto-rickshaw aggregation service in Delhi has put a question mark on the viability of the business model at a time when others in the space such as MGaadi and AutoWale have also failed to raise big money or scale up.

Companies such as Ola and Uber were offering extra incentives per trip for drivers to log on to their platforms but they could not scale it due to various reasons, primarily related to customer adoption. Their own taxi products also competed with the auto-rickshaw offering, which often had higher rates per kilometer.
 

There are factors of convenience that make cabs score over auto-rickshaws, despite a base fare they charge. In many Indian cities, auto-rickshaws either don’t have metres installed or their drivers decline to ply by meter rate, fleecing customers. This challenge prompted many companies to start online aggregation. The apps would also calculate ride fare, based upon GPS data. However, many city transport departments such as Delhi’s have come up with new meters that even print out receipts after a trip ends, thus negating need for the apps.
 

The Delhi government’s own app called Poocho, which aggregates auto-rickshaws has failed in the market, primarily due to nil incentive for a driver to take bookings.
 

Rival Ola continues to offer an auto rickshaw aggregation service in India. Ola currently has about 65,000-70,000 auto-rickshaws registered on its platform in the country. Uber’s exit from the auto space leaves Ola and its smaller rival Jugnoo in the battlefield.

This is an excerpt from Tech in Asia. You can read the full article here.