Indian taxi market is estimated to be around $8 billion in which 5% is under organized sector, and others are wide open in the market. It is being projected that in the next 5 years, organized players such as Uber, Meru and Ola will capture 15% of this market, which is growing at an astounding rate of 45% per year.
Driven by Technology
Primarily dependent on smartphone technology, the online taxi aggregators’ service have reached this height especially Uber and Ola cabs, by introducing online wallets, safety apps for women that brought down the prices considerably to Rs.10/km.
Mergers and Acquisitions
It needed a lot of cash for ‘Taxi for Sure’ to maintain its vehicles and funds that amount to $60 million. Ola Cabs went to acquire it which had a huge support from Japanese banks. The situation of acquiring by big companies is likely to continue for other smaller cab businesses like ‘Meru’ also.
Roughly pictured as:
Unorganized market—individual operators or cabs (88% of market)
Radio cabs – companies coming under ‘Radio Cab Scheme’ (5% of market)
Aggregators – single business brand that aggregates taxi service like Uber, Ola cabs etc. (0.5%)
When the aggregator services has the huge funding than any other taxi companies or individuals, radio taxis is competing with a nice strategy in terms of city coverage, number of fleets and comparatively lower prices.
Among the app based taxis, Ola cabs has the first ranking, even as the three major aggregator companies Uber, Ola and TaxiforSure cover major cities quite similar to each other.
The Forecast for the future
Apart from the app services provided by Ola and other companies, radio taxi will also have its own space and growth. Much depends on the cost offerings in comparison with the public transport system for emerging as a long-term service.
At the same time, Ola has a nationwide cab booking app and there are other apps from small companies will make a difference in the next 3 years. The idea is to bring down the costs for both the customers as well the taxi companies. There will be more ride-sharing and e-hailing apps sprouting up in the Indian market.
And for the app market to survive, it’ll depend on the features irrespective of iOS or Android platforms that it uses. Personal experience with the cab services like when a passenger enters a new or unknown place away from home, the drivers behaviors also matter. Especially after the Delhi incident cab companies have to build confidence measures with the public.