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Research Partnership Platform8th meeting
Wednesday, 5 July 2017Room XVII, Palais des Nations, Geneva
Uber - The Competition Killer or The Competition Trigger ?
Presentation by Mr. Shirish Deshpande
ChairmanMumbai Grahak Panchayat (MGP - India)
India
This material has been reproduced in the language and form as it was provided. The views expressed are those of the author and do not necessarily reflect the views of UNCTAD.
The Competition Killer or
The Competition Trigger ?(India Case Study)
U B E R
By
Adv. Shirish Deshpande,
Chairman,
Mumbai Grahak Panchayat
(MGP - India)
Intra- city travel : Entry of the players
Black&Yellow
Since
1968
Auto Rickshaws
Since
1984
Radio Cabs
Since
Meru : 2007/ 08
App based Taxis
Ola : 2010
Uber : 2013
Parameters Auto Rickshaws Black & YellowTaxis
Radio Cabs (Meru& Mega)
App Based Ola & Uber
Structure Owner-driven ordriver-drivenrickshaws and
Unionised
Owner-driven ordriver-drivenrickshaws and
Unionised
Self owned cabs driven by drivers
Aggregators
Pricing structure Fixed by transportregulator, highly
influenced by unions
Fixed by transportregulator, highly
influenced by unions
Fixed by transportregulator
Unregularised, dynamic,
algorithmic pricing
Typically preferred fare
Long distance fare Long distance fare Long distance fare/ airport fares
Any
Frequency of refusal
Very high Very high Less Rare
Type of meter Analogue till 2012, electronic since
Analogue till 2012, electronic since
GPS based No- meter, fare shown on
Smartphone/ email
Why the Perception Survey?
Strong opposition by traditional and radio taxi/ auto drivers to entry of Ola/ Uber
Frequent agitations & even strikes to protest against their operations
General satisfaction of passengers using Ola/ Uber fares and services quality
Hence the Perception Survey of Passengers by MGP – India in 2016
City Responses (out of 76169) % Responses
Mumbai 62691 82.31
Thane 6547 8.60
Navi Mumbai 3195 4.19
Pune 1037 1.36
Mira Road/ Vasai/ Virar
443 0.57
Bangalore 172 0.23
Hyderabad 74 0.10
Nasik 64 0.08
Ahmedabad 54 0.07
Kolkata 53 0.07
Miscellanous 18492.42
MGP’s Perception Survey of Uber/ Ola - 2016
Regularity of using Ola/ Uber
11%
40%
15%
13%
21%
Population
Everyday
Several times a week
Once a week
Once a month
Not regular
Regularity Responses (out of 76169)
Everyday 8,463
Several times a week 30,143
Once a week 11,715
Once a month 9,788
Not regular 16,060
Fares of Uber/ Ola compared to rest
47%
22%
9%
22%
Population Cheaper than ALL
Cheaper than ALL taxis but more expensive thanAuto Rickshaws
Cheaper than Meru/ Tab Cab but expensivethan Black&Yellow Taxis / Auto Rickshaws
More expensive than Meru/ Tabcabs,Black&Yellow Taxis & Auto Rickshaws
Fares Responses (out of 76169)Cheaper than ALL 35,850
Cheaper than ALL taxis but more expensive than Auto Rickshaws
16,772
Cheaper than Meru/ Tab Cab but expensive than Black&YellowTaxis/ Auto Rickshaws
6,652
More expensive than Meru/ Tab cabs, Black&Yellow Taxis& Auto Rickshaws
16,895
Find Surge Pricing expensive?
65%
35%
Population
Yes
No
Opinion Responses (out of 76169)
Yes 49,887
No 26,282
Feel harassed by refusal by Autos/ Taxis
94%
6%
Population
Yes
No
Opinion Responses (out of 76169)
Yes 71,726
No 4,443
94.15
5.050.79
0,0
10,0
20,0
30,0
40,0
50,0
60,0
70,0
80,0
90,0
100,0
Very Important Important Not Important
Importance
Importance
Rate the importance of these aspects of travel [Accepting where the
commuter wants to travel]
OpinionResponses (out of
76169)
Very Important 71,716
Important 3,850
Not Important 603
66,10
31,53
2,37
0,00
10,00
20,00
30,00
40,00
50,00
60,00
70,00
Very Important Important Not Important
Importance
Importance
Rate the importance of these aspects of travel [Efficient central digital based support system]
OpinionResponses (out of
76169)
Very Important 50,345
Important 24,019
Not Important 1,805
79,8
19,0
1,20,0
10,0
20,0
30,0
40,0
50,0
60,0
70,0
80,0
90,0
Very Important Important Not Important
Importance
Importance
Rate the importance of these aspects of travel [Good condition of cars]
OpinionResponses (out of
76169)
Very Important 60797
Important 14484
Not Important 888
Rate the following aspects[Willingness of drivers to take commuters
where desired]
77
5
18
2
35
63
5
30
65
54
38
8
0
10
20
30
40
50
60
70
80
90
Good Average Bad
Ola/ Uber
Black&Yellow Taxis
Rickshaw
Meru/ Tab Cab
Responses (out of 76169) Ola/ Uber
Black&YellowTaxis Rickshaw Meru/ Tab Cab
Good 58,450 1,586 4,103 41,027Average 4,236 26,781 22,822 29,322
Bad 13,483 47,802 49,244 5,820
Rate the following aspects of [Availability of cabs]
63
19 18
11
51
38
18
433937
46
17
0
10
20
30
40
50
60
70
Good Average Bad
Ola/ Uber
Black&Yellow Taxis
Rickshaw
Meru/ Tab Cab
Responses (out of 76169) Ola/ Uber
Black&YellowTaxis Rickshaw Meru/ Tab Cab
Good 47,812 8,114 13,358 28,521
Average 14,315 38,761 32,752 34,692
Bad 14,042 29,294 30,059 12,956
Rate the following aspects [Presentability & Appearance]
70
1218
2
43
55
6
4450
46 44
10
0
10
20
30
40
50
60
70
80
Good Average Bad
Ola/ Uber
Black&Yellow Taxis
Rickshaw
Meru/ Tab Cab
Responses (out of 76169) Ola/ Uber
Black&YellowTaxis Rickshaw Meru/ Tab Cab
Good 53,460 1,537 4,640 34,812
Average 9,115 32,358 33,480 33,433
Bad 13,594 42,274 38,049 7,924
Rate the following aspects[Behavior of Driver]
Responses (out of 76169) Ola/ Uber
Black&YellowTaxis Rickshaw Meru/ Tab Cab
Good 51,244 6,209 6,724 40,725Average 10,201 41,431 33,475 30,650
Bad 14,724 28,529 35,970 4,794
67
1419
8
55
37
9
4447
53
41
6
0
10
20
30
40
50
60
70
80
Good Average Bad
Ola/ Uber
Kaali Peeli
Rickshaw
Meru/ Tab Cab
10) Are the drivers of Ola/ Uber comfortable with the mobile GPS
system?
79%
21%
Comfortable with the mobile GPS system
Yes
No
Comfortable with the mobile GPS system
Responses (out of 76169)
Yes 60,293No 15,876
11) How do you find the feedback system of Ola/ Uber
29%
28%
24%
19%
Feedback system of Ola/ Uber
Very good
Good
Satisfactory
Unsatisfactory
Feedback system of Ola/ Uber
Responses (out of 76169)
Very good 21,838Good 21,114
Satisfactory 18,426
Unsatisfactory 14,791
12) Would you like to have GPS based meters installed in Ola/Uber?
73%
7%
20%
GPS based meters installed in Ola/Uber
Yes
No
Can't Say
GPS based meters installed in Ola/Uber
Responses (out of 76169)
Yes 55,620No 5,003
Can't Say 15,546
13) Are Ola/ Uber offering better option of travel?
80%
20%
Ola/ Uber offering better option of travel?
Yes
No
Ola/ Uber offering better option of
travel? Responses (out of
76169)Yes 60,939No 15,230
44
21
11
7
5
3 3 6Uber
Ola
Taxi for sure
Meru
Easy Cabs
Quick Cabs
Mega Cabs
Others
44
17
10
11
7
34 4
Uber
Ola
Taxi for sure
Meru
Easy Cabs
Quick Cabs
Mega Cabs
Others
50
14,6
8,5
11,2
7,5
2,3 3,7 2,2Uber
Ola
Taxi for sure
Meru
Easy Cabs
Quick Cabs
Mega Cabs
Others
UBER Market Dominance – Delhi/ NCR By Total fleet size (%) By Active fleet size (%)
By Total trips per day (%)
Source : Report 30.9.2015 of NewAge Tech Sci Research Pvt.
Ltd.
0
5
10
15
20
25
No
v-1
3
Dec
-13
Jan
-14
Feb
-14
Mar
-14
Ap
r-1
4
May
-14
Jun
-14
Jul-
14
Au
g-1
4
Sep
-14
Oct
-14
No
v-1
4
Dec
-14
Jan
-15
Feb
-15
Uber Black (in INR)
Average (in INR)
The average market price of radio taxies exisiting in Delhi – NCR before the launch of Uber was about
INR 23/ km
Uber Black Uber X Uber Go
Nov-13 20 Not launched Not launched
Jun-14 18 15 Not launched
Nov-14 18 15 12
Feb-15 12 9 7
Predatory Pricing by UBER
0
5
10
15
20
25
Nov-14 Dec-14 Jan-15 Feb-15
Go (in INR)
Average (in INR)
0
5
10
15
20
25
Uber x (in INR)
Average (in INR)
Predatory Pricing by UBER
No Market dominance by Uber
Hence
No question of predatory pricing by Uber
Competition Commission of India rules
Prima Facie Market Dominance by Ola
Predatory pricing under investigation
Competition Commission of India rules
App based taxi journey in India
2013: Uberlaunches in India
2014 : Ola launches its app
March 2016 :
Uber claims to have 35-40% of the market share
June 2016: Uber and Ola operating in over 20 cities with 3,50,000 drivers
2017: Number of vehicles affiliated dropping by almost 25% due to lesser incentives to drivers
June 2017: Ola & Ubercome under regulatory framework
* No Predatory Pricing allowed
* No Surge Pricing allowed
* Uber & Ola to operate within minimum & maximum fare slab
to be prescribed by Transport Regulator
State of Maharashtra notifies Regulations to regulate App based taxi services
Transport Regulators Decide To Regulate
Uber & Ola in India
Pre - 2013
• High fares
• Over-charging
• Poor quality vehicles
• Frequent refusals
• Rude behavior
Post - 2013
• Competitive/ discounted fares
• Surge Pricing
• Better quality vehicles
• No refusal
• Good behavior
Taken for a ride? (2013 – 2017)
Category 2013 2014 2015 2016 2017
Auto Rickshaws
Switch from mechanical
to electronic meter
Protest against Ola/ Uber entry
Go on strike against Ola &
Uber
Go on strike against Ola &
Uber
Plan to introduce own app
TaxiSwitch from mechanical
to electronic meter
Protest against Ola/ Uber entry
Go on strike against Ola &
Uber
Protests continue
Plan to introduce own app
Meru/ Mega Cabs
5000 cabs10,000 cabs, plans to grow
Ola’s revenue crosses Meru’s
revenue
Legal challenge to
Ola/ Uber
Struggling to survive
competition
Uber/ OlaNew entry,
Unregulated operations
Predatory prices,
incentives to drivers
Predatory & surge pricing
Lesser incentives –Higher surge
Prices to be regulated –(Min/Max)
Way forward
Players
Live and let live
Modern technology within regulatory
framework
Legal accountability&
transparency
Passengers
Wider and better choice
Comfort & convenience
Competitive Regulated fares
Drivers
More secured
Better conduct
Better living
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