Uber entered the Indian market three years ago, to change how we look at urban transportation. Over these three years, the brand has managed to grow just from ‘secret Ubers’ in Bengaluru to 28 cities across India. There have been many challenges, including the fierce competition from local rival Ola and certain regulatory issues, but the brand has registered strong growth nevertheless.

After US and China, India was a major market for the brand. Not being a direct fit in the Indian market, Uber adapted and introduced some firsts for the Indian market. In most markets, Uber relied on credit cards. However, that wasn’t the favourable mode of payment for Indian buyers with low credit card penetration and the RBI was raising eyebrow because their payment method skipped the mandatory two step authorisation in favour of seamless user experience. They addressed this in 2014 by associating with Paytm for ride payments.

When they started moving beyond the metro cities, they also started allowing the users to pay through cash in early 2015. Hyderabad became the first city in the world in which Uber began accepting cash payments, a feature which has since been expanded to few other markets. The addition of Auto rickshaws was another first for the Indian market despite the fact that they were already a popular mode of transport in many other Uber markets. To deal with the heavy congestion in metro cities and offer last mile connectivity to complement metro train network, Uber also introduced UberMOTO motorcycle taxis. The service faced some regulatory roadbumps but should be back soon considering the advantages for daily commuters.

The cab aggregator has also offered the opportunity for many to be self-employed. There is a new breed of micro entrepreneurs who are managing small fleets and working with Uber to earn their livelihood. To cover more ground towards getting more people in less cars, Uber introduced the UberPOOL feature in five cities in India. This has helped in reducing congestion and the pollution in our cities. According to the data shared by Uber in a blogpost, the feature has saved the need of travelling 12,880,000 kilometres resulting in saving of around 605,000 litres of fuel and 1,400,000 kgs of carbon dioxide.

“Our three year journey in India is immensely gratifying as Uber’s growth has unlocked thousands of entrepreneurial opportunities, who are now able to earn a livelihood with dignity, while offering freedom of mobility to millions of riders across 28 cities in the country.”

One of the many reasons growth of Uber, specifically the UberPOOL service is crucial for the Indian market is because it opens up people to sharing resources. As people get acquainted to the idea sharing cabs, they will eventually open up to the idea of sharing their personal resources which will be a major driver of sharing economy. You can read more about their journey on their website here.

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Motorcycle taxis were already a popular means of transport in Thailand and was the first market for Uber to introduce UberMOTO motorcycle taxi service. The service was introduced in the region in February this year after almost two years of Uber being operational in the region. However the latest order by Thai government prevents them from operating the service for now. Grab, the other major player in the cab space in Thailand will also have to suspend its motorcycle taxi service.

Both the companies have to suspend their motorcycle taxi services because the Thai government determined that there is a conflict with existing network of taxis. The news has also been confirmed by Uber through a blog post on their website and that they are halting the service temporarily.

The launch of UberMOTO in Thailand was soon followed by other similar markets like India and Indonesia. While the service continues to run without any major hiccups in Indonesia, there have been regulatory issues in India as well. The India operations of UberMOTO were launched only few weeks after Thailand in Bangalore. The state government was quick to dismiss the idea of motorcycle taxis and deemed them illegal because there are no rules for two wheelers to be registered for commercial use. However, in other parts of India, the state governments are supporting the idea.

A news report by Reuters indicates that there are over 186,000 motorcycles registered to offer taxis in Bangkok and the authorities have started cracking down on riders employed by Grab or Uber. However, Uber is optimistic about Thailand as expressed in the blog post. It says, “We are pleased that the Thai Government is open to discussing new rules that would enable services like UberMOTO for passengers to operate”.

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Karnataka government has been quick to dismiss the idea of recently launched bike taxis. Soon after the launch of UberMOTO and Ola Bike, transport department officials in Bangalore deemed them illegal and issued a notice early last week. This is because there are no rules for two wheelers under the Motor Vehicles Act and therefore no room for commercial use of the same.

Bike taxis are very popular in some Southeast Asian countries and hold the potential to reduce congestion issues in Tier 1 cities in India. However it is a fresh concept in India and the lack of any regulations will be the bottleneck for companies trying to enter this space. Motorcycle rental industry in India also faces challenges because of the same reason.

Another recent introduction by the cab hailing companies, ride sharing, has also ended up on wrong side of the law. Multiple cabs have been seized citing the reason that they have contract carriage permit but picking up multiple passengers means that they are operating as stage carriages. While on one hand, the government is inviting innovations from private players in transportation sector, it has been slow in adopting the trends. We got to see similar situations when these cab companies started operations in India and they were deemed illegal because there was no regulation for the same.

Despite the challenges, investors haven’t shyed away from this segment. The bike taxi and grocery delivery app NOW has recently raised USD 200K in angel funding. Considering the fact that bike taxi services are functional for a while in Gurgaon and Baxi, one of the operators, is further expanding to new regions in NCR like Noida and Ghaziabad, we can expect the operators and government to find a middle ground soon. But even after the regulations are in place, new players in the bike taxi space won’t make progress easy for Ola and Uber.

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India has witnessed a sudden boom in travel startups for the past few years. Few factors that can be stated for this rapid development are the wide availability of internet, smartphone penetration and the growing number of travellers. According to the website, 20 bike taxi startups have been launched in India over the last two years. Some of them are Baxi of Gurgaon and Rapido of Bengaluru. Uber, a leading taxi dispatch company headquartered in California, has recently entered this market space. With the aim to further increase its customer base and obtain monetary benefits, Uber will launch its ultra-economical bike taxi service called ‘UberMOTO’ on a pilot basis today in Bengaluru.

The fares of Uber’s bike taxi service will be as low as Rs 3/km. This makes it the cheapest offering by Uber so far. The brand will charge 20% commission on each ride and provide the travellers an option to pay with either cash or credit. Later, they will be given an electronic receipt too. For the safety of the trippers, the service will include GPS tracking, two-way feedback and options to share noteworthy trip details with family and friends. The drivers are verified through their standard procedure similar to all the other cab drivers that work with Uber. The drivers will carry a helmet for the passengers they pick up.

This offering by Uber might be quite profitable for Karnataka Transport Department. Bengaluru has 3.8 million two-wheelers compared to 1.1 million cars as of March 2015. If UberMOTO turns successful, it might lead to a huge jump in the number of riding options for commuters and more revenue for Uber. This might help the city eliminate traffic congestion and pollution.

Sharing a different perspective altogether, according to the report, Neel Ratan, executive director at audit and consultancy firm PwC, quoted:

“The option may not be completely infeasible for women commuters as they can be opt for women riders on two-wheelers.”

UberMOTO will have to face a stiff competition from other bike taxi brands that are attempting to expand their businesses in differ Indian cities.

Uber is a popular brand worldwide and its bike taxi service in the Indian travel market space might be quite beneficial for the company as India is one of the world’s biggest market for two-wheelers. Although predictive to a certain extent, how will if fare in the coming time is yet to be seen.

Also Read: Uber launches UberMoto bike taxi service in Bangkok

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In another one of its experiments focused on local markets, Uber is launching its bike taxi service in Thailand. The new service is called UberMOTO and allows travellers to call motorcycle cabs for local commute. According to the press release by Uber, the service is aimed at addressing the severe traffic congestion problems. According to Uber, over 1500 new cars are added to the streets of Bangkok every day and as a result, the traffic speeds have dropped below 16 kmph which isn’t good for productivity.

UberMOTO, the motorcycle taxis, can be called similar to any other Uber cab using the app. The drivers are verified through their standard procedure similar to all the other cab drivers that work with Uber. The drivers will carry a helmet for the passengers they pick up.

While they haven’t said anything about a launch in any other markets, there are many other markets in Asia including India where this concept could be a huge success. Congestion and rising pollution levels are major issues in almost all major cities in this region and reducing the dependence on cars as a transport option is being seen as a solution to the problems.

To promote this initiative and raise awareness about motorcycle safety, Uber will be engaging in offline activities in association with Thai Traffic Police and Head Awareness Club to engage with young people.

The success of this pilot project will define their steps in bike taxi segment in other markets. In India we already have such services operational in Gurgaon. As a launch promotion, Uber is offering free rides to first time users until March 15.

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