The premature death of Transportation as a Service in India

And why we may not skip car ownership just yet.

After I moved back to India, I almost bought a car. But after looking at Gurgaon’s roads, the cost of ownership and the traffic I might have to deal with, I decided against it.

More so because Ola (an India specific Uber competitor backed by Softbank) and Uber were raining discounts and incentives drivers and customers, and there were plenty of cars to be found at the tap of a button.

Will India skip Car ownership entirely and move to transportation as a service?

The more I used Ola and Uber, the more I was convinced that the value and utility that they provide are here to stay. And it made me wonder whether India is perhaps ready to skip car ownership entirely (given that only a small percentage of the population owns cars).

One would think that transportation as a service (and perhaps driverless cars) will quickly become a reality in India, skipping even car ownership much like the mobile adoption happened where a generation of folks skipped the PC entirely.

Unfortunately, I don’t think that this will happen anytime soon.

This despite the fact that car ownership is still really small compared to global numbers and is predicted to be 1.1% less in 2016.

 Ola and Uber is still very expensive for a large part of the Indian population, even after discounts.

And with the incentives and discounts fading, both customers and transportation providers are up in arms, especially because public transportation is far more competitively priced (and subsidized by the government).

Let us not also forget unorganized solutions exist in large cities and are able to ferry most passengers point to point for Rs 10–20 at the most.

Passengers waiting for disorganized and owned transportation services such as private cabs & 3 wheeler “autos” 
Passengers waiting for disorganized and owned transportation services such as private cabs & 3 wheeler “autos” 

The consistency of experience is an issue. Uber tries hard to be consistent and Ola tries to be different all the time (much to my dismay introducing many different varieties of the same service). But the accessibility of services on demand, and on time, is a serious problem in India. 

The problem of consistency is even more acute with Ola who seems to have new services every single time I log in and driver experiences that are vastly different (for the worse) when compared to Uber.

Old habits die hard. It amazes me how many folks are willing to keep windows open and the dust in, in a city like Gurgaon rather than close it up and switch on the aircon for example, for the sake of saving fuel. Some either go too fast, some are just too slow.

Winter pollution in Gurgaon
Winter pollution in Gurgaon

Given the traffic in Indian cities, having a schedule planned, almost certainly never works. Commute times are already notorious and are expected to double within the next 4–5 years.

Drivers cannot find you on their own, and it takes 2–3 phone calls for Ola drivers (to a lesser extent for Uber) to get to find your pickup location and arrive.

The professionalism of drivers is another issue. Many tend to cancel requests that are slightly far out or ask you to cancel if they don’t want to service your location. There’s always a risk of bad behavior by drivers against women, when they travel alone.

The quality of cars is also an issue. In many countries, private car owners ride Uber (or an alternative) to make extra money and the outcome of that is better and well-maintained cars on road.

Ola and Uber drivers are taxi owners who have recently bought cars or work for someone else who owns taxis. Cars are not always well maintained, are may not be the safest on road.

Unionized taxis are a big problem as well because they can bring the entire economy to a halt when they feel that the fares are not enough. This is actually happening as we speak for the same reasons and both Ola and Uber are being held to a ransom due to a strike leaving customers high and dry.

Payments are a pain (no I don’t want to transfer to a wallet from a bank wallet) and it is absurd to enter a secondary pin just because the backend systems are not secure enough to handle fraud.

Somehow India is unhealthily obsessed with mobile wallets which don’t seem to provide any real value except for removing the two-factor authentication.

Lastly, the pride of ownership is huge in India. It will be a while before cars are treated as a commodity.

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What will it take to skip car ownership?

IMO, skipping car ownership will require transportation platforms to provide enough value, at extremely competitive costs together with a fair amount of personalization that replaces the experience of owning a car.

Autonomous vehicles may be able to remove the human (and inconsistent) aspect of transportation services but in an economy where there’s plenty of labor available and voter appeasing governments, I don’t really see that taking off in India at scale within the next decade.

As a matter of fact, I have been exploring buying a car to avoid the uncertainty and delays caused due to the dependency on these transportation providers.

In Conclusion, I think that Ola and Uber might continue to exist and might become much larger players. But I do not see them making a very significant dent or creating a habit that makes people skip thinking about car ownership entirely within the next couple of years.

As with most of my blogs, I will keep correcting content if I find errors. 

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