road to recovery

Of the new users coming to ride-hailing services in the past six months, 20% have gone from public transport.

The ride-hailing sector has gained momentum. According to Redseer data released in May this year, markets mainly Ola, Uber and Rapido saw a 69 per cent recovery in demand compared to the pre-Covid period. Overall, these companies saw 78 million rides in March 2021; The number stood at 113 million in January 2020.

Fears of contracting the virus still loom large, according to RedSeer, with autos – due to their affordability and safety aspects – recovering faster than cabs and bike taxis, and registered 25 million rides in March 2021. The market share of autos increased from 23% in Q1 CY20 to 32% in Q1 CY21, while the market share of cabs declined from 59% to 51% during the same period.

in a fast street

Rapido claims that its business returned soon after the second wave stopped. Rapido co-founder Arvind Sanka says the company’s target group has changed during the pandemic due to the nationwide work routine and the closure of colleges. “Currently, the market is witnessing a trend of users shifting from public transport to ride-hailing services, which are safer alternatives, and especially to autos and two-wheelers due to their affordability.” Rapido has launched two marketing campaigns to promote its services with a focus on metros.

Uber has also seen an improvement in its business across India. “On the back of increasing demand for low-cost products such as autos and two-wheelers, we aim to increase safety and revive the economy,” says an Uber spokesperson. In March this year, Uber provided free rides worth Rs 10 crore to help people travel to and from their nearest vaccination centres.

Carpooling app Shrid launched the snubber feature on its app to allow members of its hyper-local community to help each other out during the second wave of the pandemic. Lakshman Chadha Jha, CEO and co-founder of Shrid, says the feature helped the company “gain traction and increase user activity with over 8,000 app downloads since its launch in April 2021.” Apart from its presence in metros, Shree is focusing on expanding to Gurugram and Kochi in the coming months.

long road

Ankur Pahwa, partner at EY, says that 20% of the new users coming to ride-hailing services in the last six months have migrated from public transport. Despite the relatively high prices, “safety is important for people now”, he adds.

A key factor that helped these companies get back on track quickly was the availability of drivers. During the lockdown, some of them engaged their drivers in B2B last-mile deliveries for food aggregators like Swiggy and Zomato. Pahwa says, “This partnership was done to better utilize and retain the assets and the potential of the driver.

Despite being an asset-intensive market, the ride-hailing is expected to see higher growth, say analysts. With roads becoming more congested and car ownership declining, Pahwa says, ride-hailing will benefit in the coming years.

Many new players have entered this field. Take, for example, Prakriti E-Mobility’s Evra Cabs, an EV ride-hailing company that started in 2019, and Whyde, a shared mobility start-up, which was launched in July 2021. Apart from ensuring the sustainability of the business, these new entrants are also seen as big players. Only companies that enable people to travel in a cost-efficient manner through a hassle-free process while keeping their safety in mind, says Rajiv Singh, Manager, Deloitte Consulting, will go ahead fast.

Also, the arrival of electric vehicles could change the game. “There could be a drastic change in operating expenses and economics, as fuel plays a big role in this market,” says Pahwa.

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