2nd Covid wave expected to impact the business of mobility players in India

Industry executives say the second wave of Covid-19 pandemic may severely impact the business of mobility companies

The second wave of Covid-19 pandemic is expected to have an impact on the business of top mobility players in India such as Uber, Ola and Rapido. However, industry insiders said that the impact is not going to be as drastic as last year as this time the lockdowns are more methodical in the country.

US ride-hailing firm Uber Inc has said that its business in India has been affected hard by the second Covid-19 wave which has triggered renewed lockdown-like restrictions across the country. 

“One of our top priorities is to rebuild the driver base,” said Uber chief executive officer Dara Khosrowshahi, during an earnings call this week. “Our research shows that drivers who left the platform last year primarily did so for two reasons; concerns about safety and concerns about there being enough rider demand.”

Khosrowshahi, has said that because of the safety concerns of covid, there's a greater hesitation for some drivers to come on board to drive other people versus drive food.

Nelson Chai, chief financial officer, Uber, said the company expects the segment's recovery to continue to be driven by improving vaccination rates in the US and several international markets more than offsetting headwinds in markets like India and Brazil.

US regional trends continue to improve the most markets. The mobility recovery started to pick up pace in March and improved further in April. With strong vaccination rates in several key markets, including the US, Uber is optimistic that this trend should accelerate going forward. Outside the US, Uber sees significant improvement in several markets in APAC, including Australia, New Zealand, Taiwan and Hong Kong. Uber said bookings in the US for April had recovered to 62 per cent compared to April 2019. In the UK, overall bookings had recovered to 80 per cent versus 2019.

Uber posted that overall bookings on its platform grew 24 per cent year-on-year to $19.5 billion in the three months ended March 31. In this, the food delivery business drove $12.5 billion in bookings. The ride-hailing bookings declined 38 per cent during the period. The bookings from Uber Eats more than doubled.

In India, industry executives said the second wave of Covid-19 pandemic may severely impact the business of mobility companies if a strict nationwide lockdown is implemented once again like last year. “Besides that, we are also expecting some dip in business as people are not travelling and going to offices or malls, which remain closed,” said the person.

The mobility space had recovered 63 per cent compared to the pre-Covid days, with 71 million rides in January 2021, according to RedSeer Consulting. However, with the surging Covid-19 wave in the country, the recovery is likely to go on a downward trajectory with a drop of 30-40 per cent in the coming months as many states like Maharashtra, Delhi and Karnataka among other states go into lockdown, said RedSeer.

After more than 9 months of lockdown, many offices resumed at 50 per cent capacity leading to high growth in the category. As the second wave of pandemic struck, March 2021, again witnessed a decline in the number of rides.

Last month, Uber unveiled an Rs 18.5-crore initiative to get 150,000 drivers on its platform vaccinated over the next six months, stepping up efforts to help India’s fight against the second wave.In March, it had pledged Rs 10 crore of free rides to help people get to and from the nearest vaccine centre. This year alone, Uber has facilitated 9,000 free online medical consultations for drivers and their families through DocsApp.

As the ongoing lockdown restricts essential supplies for millions of Indians, India’s largest bike-taxi platform Rapido has announced a partnership with major essential suppliers such as  Zomato, Swiggy, BigBasket, Delhivery, Grab, Xpressbees, and Udaan for aiding last-mile deliveries.

These partnerships are live across Delhi NCR, Hyderabad, Bengaluru, Chennai, Kolkata, Vijayawada, Tirupati, and Guntur. Rapido is supporting these partners in the delivery of medicines, essential groceries, and food from restaurants. It is helping small-scale industries stock up their inventory and finding more ways of contributing to the fight against Covid-19. Rapido is the third-largest ride-sharing platform present in close to 100 cities serving over 10 million customers with over 15 lakh registered Captains (driver-partners).