Ola and Uber have changed the way Indian travel. It has brought the power to travel in a car for the individuals or families who could never afford a car in their life. This is a smarter alternative to owning a car. Since their inception, both the companies have seen stellar growth in the Indian market and it is still growing. More and more people are migrating to the urban areas in search of jobs and better living standards. In the cities, public transport is often extremely crowded, so the people who could afford to spend a little more prefer to use cab-hailing services such as Ola and Uber.
The growth continues, however, it has shown a steady decline in the growth figures. As per reports, in 2016, Uber grew at 90%, in 2017, it reached 57% and in 2018 it fell to a mere 20%. There are a number of reasons behind this issue.
The prime reason is the rising prices. The average cost of public transport in India is around Rs. 3 or 4/km. People who could afford a little more such as 7 to 10/km opted for the cab services. However, it has been seen that in 2018, the average cab rides rose from Rs 10/km to Rs 15/km. This has compelled many users to shift back to the public transport systems.
Another reason for lesser growth might be due to shifted focus. Ola and Uber both have started venturing into many verticals such as food delivery, online payments and loyalty programmes. These verticals need much attention and hence Ola and Uber are finding it difficult to manage their core business. Smartphone penetration is growing in the country along with internet usage too. This is a positive sign for the cab-hailing companies as it might be a period of growth for the next couple of years.