App-based cabs like Ola, Uber preferred choice for commuters as personal vehicles take a back seat

Financial Express,  February 25, 2020

App-based cab booking service offered by companies such as Ola and Uber is the preferred choice for commuters in the Delhi-NCR region as 35 per cent of the people commuting in the region has cab booking apps as the most frequently used mode of private transport, according to a survey of 1,377 commuters in Delhi NCR by think tank Cuts International. This was followed by traditional auto-rickshaws being preferred by 23 per cent of the respondents while 21 per cent still had personal vehicles including four and two-wheelers as the preferred route to commute.

“Non-app based taxis which are usually hailed through calling the local taxi stand or contacting the driver directly over the phone or hailed from a taxi stand/ hub also seem to be a preferred choice, but only to a limited extent,” the survey revealed. In terms of public modes of transport, metro dominated commuters preference with 88 per cent share followed by 8 per cent choosing public buses.

Less travel time, reliability and availability were the three top reasons cited by respondents for choosing app-based cabs while less cost, availability, and less travel time were the reasons for respondents who had personal vehicles and non-app auto-rickshaws as their favourite commuting modes. “The importance of non-price factors, especially travel time, reliability and availability, is also indicative of the importance of cross-group network effects generated by such platforms,” the survey titled An Evidence-Based Analysis of Relevant Market — The Case of Ridesharing in Delhi NCR said. On the other hand, reliability and availability in particular of app-based services are “supply-induced reasons” and thus are likely to be directly linked to the critical mass of drivers available with app-based services at all relevant times.

The ride-hailing market size in India is estimated to be around $36.9 billion in 2020 and is likely to increase to $54 billion by 2023 growing at a CAGR of 13.5 per cent, as per Statista. Currently, the average revenue per user (ARPU) is $178.22 in India with the overall number of users this year to be 20.7 crores.

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