Professional Documents
Culture Documents
Project Report Akash Mba
Project Report Akash Mba
On
Study on Transportation Management
(A study on Effectiveness of Ola &Uber Services)
Mentor
{Dr. Bhupender Kumar Som}
Submitted by:
Akash bhardwaj
(201606848)
1
CERTIFICATE
This is to certify that the project work done on the topic “A Study on Effectiveness
of Ola & Uber services” is an original work carried out by Mr. Akash Bhardwaj
under my supervision and guidance. The project report is submitted towards the
fulfillment of two-year, Post Graduate Diploma in Management. This work has not
been submitted anywhere else for any other degree/diploma.
2
DECLARATION
I hereby declare that this project titled “A study on Effectiveness of Ola & Uber
Services submitted to SCDL, Pune is my original work, carried out under the
guidance of (Dr. Bhupender Kumar/Associate Professor) in Partial Fulfillment for
the award of Post Graduate Diploma in Management (PGDM). All the contents of
this Project report are true to best of my knowledge and have not been submitted
earlier to any other university or institution for the award of Degree/ Diploma/
Certificate or published any time earlier.
Signature:
Akash bhardwaj
(201606848)
3
ACKNOWLEDGEMENT
I Akash bhardwaj extremely grateful to SCDL Pune for the confidence bestowed
upon me and entrusting me with the project titled “A study on Effectiveness of
Ola&Uber Services”.
4
TABLE OF CONTENTS
EXECUTIVE SUMMARY
India, including the key Technology trends, market drivers and restraints. To
5
understand the perception of the riders towards their safety while travelling in cabs.
To analyze the customer easiness while booking a cab. Either through a company
website or they are mobile friendly more. To understand the customer perception
regarding the reliability of services. To understand the effect of radio market on the
Taxi market. To analyze the customer experience which is availed through these
perception for money paid to these cab services providers consider to be valuable
or not. Tounderstand the impact of radio market on the other cab service provider.
India is a developing nation and also with this on-going development, the standard
of living of the middle-class people has raised leading to an increase in the wants
6
and needs of this middle class. Not all people from this middle-class background
have the ability to buy personal vehicles for travelling hence they highly depend on
Public Transport Services. One of the most important source of Public Transport
Services are the Taxis which are used by lakhs of Indian citizens every day to
commute to their workplace, go to shopping with their family, go to places for
holidays, go to the airport and the list continues. Focusing on getting cabs for short
distances within a particular city or for going to the airport or from the airport to
some particular place, it was very inconvenient until a few years ago.
However, since the Radio cabs have entered in the Taxi market, through the use of
technology like mobile apps to book these cabs the situation has totally changed in
India. This Radio cab market has grown so enormously that the number of radio
cabs has increased way more than the number of public taxis on the road till today.
According to a study done by Sunstone Business School, the radio cab market has
grown with almost more than 15,000 cabs of India with large multi-city operators
like Meru, Taxi for sure, Uber, Tab Cab, Ola, etc. holding around 70% of the
market share along with several other new operators in the several cities. Despite
this tremendous growth in the last few years, their radio cabs are just a minuscule
portion of the entire private taxi operators in the city.
A report released by ICRABSE -1.93 % stated that the Indian passenger vehicle
industry is likely to ride on the strong growth potential of domestic taxi segment in
the near term, whereas medium to long term growth will be supported by low car
penetration level and increasing income level. Indian taxi market is still in nascent
stage, with huge scope for growth given low car penetration level and poor public
infrastructure. OEMs have also realized the market potential and have dedicated
sales team to cater fleet operators.
7
The entry of aggregators like Ola and Uber has changed competitive dynamics of
taxi market which till now has largely been fragmented and has lacked bargaining
power with OEMs with even larger organized fleet operators typically having less
than 500 cars. However, the aggregators like Ola and Uber have over 25,000 cabs
in NCR market alone. Consequently, this segment within PV industry now enjoys
a significant clout, with some OEMs setting up dedicated team to address
aggregator market,” observed the report.
The rise of taxi segment however is expected to the hit the second car purchase in
India in the near term, only in the medium term, the subsequent replacement
demand for taxis will offset such a loss.
ICRA segregated the car buyer three key segments i.e. first-time buyer,
replacement car buyer and additional car purchase.
The first-time car buyers account for 40-45 per cent of Indian car market, and
given low car penetration in India, they are likely to remain a potent force.
Similarly, replacement segment is also expected to grow at robust pace given
shortening replacement cycle of a car in Indian market. However, cab aggregator
and taxi market pose real challenge to the additional car buyer segment.
Considering that customer segment already has a car, and can rely on taxi for short
run/limited usage. Given increasing traffic woes, there is also a customer segment
which will shift towards taxi usage due to additional comfort of chauffeur driven
car without paying out for driver salary.
“However, loss of additional car buyer segment will be more than compensated in
8
the initial years by taxi fleet and replacement fleet (after few years) without having
major impact on overall demand. Cars such as Toyota Etios, Maruti
Omni, Mahindra Logan, Tata Indica and Tata Indigo are fairly popular among
taxicab operators. The livery of the taxicabs in India varies from state to state. In
Delhi and Maharashtra, most taxicabs have yellow-black livery while in West
Bengal, taxis have yellow livery. Private taxicab operators are not required to have
a specific livery. However, they are required by law to be registered as commercial
vehicles.
Taxis and all other commercial vehicles have a yellow number plate so charging
taxes and toll in highways is easier for the officials. Delhi is the only city in India
with taxicabs running only on Compressed Natural Gas. To hail a taxicab, you
normally just wait on the street or go to locations called taxi stands. Taxicabs are
referred to as taxis in India and the word cab is rarely used.
9
Most of these cabs do not have an air conditioning system but there are numerous
private taxi operators like "Cool Cab" are air-conditioning. The newer taxis are
white, one of the many reasons why the expensive taxis have been dubbed White
Taxis by the locals in cities. Taxis and all other commercial vehicles have a yellow
number plate so charging taxes and toll in highways is easier for the officials.
Depending on the city/state, taxis can either be hailed or are hired from taxi-stands.
In cities such as Bangalore, taxis need to be hired from taxi stands, whereas in
cities like Kolkata and Mumbai, taxis can be hailed on the street. There are
additional surcharges for luggage, late-night rides and toll taxes are to be paid by
the passenger. Thanks to the booming economy but due to disparities in income
many types of taxis have come up. For example, in Delhi there are 5 types of
taxi. auto rickshaws- which are the cheapest form of taxi-, Normal Taxis, Radio
Cabs, White Taxis and Tourist Taxis. In posher areas like Noida and Gurgaon auto
rickshaws are banned thus giving the taxis a monopoly. Chandigarh also has a well
established system of modern radio cabs using cars like Tata Indigo/Indigo Marina,
Fiat Siena and Maruti Esteem. Kolkata has also got many No Refusal taxis that will
never say no to the passengers.
In cities and localities where taxis are expensive or do not ply as per the
government or municipal regulated fares, people use Share taxis. These are normal
10
taxis which carry one or more passengers travelling to destinations either en route
to the final destination, or nearby the final destination. The passengers are charged
according to the number of people with different destinations. A similar system
exists for auto rickshaws, known as Share autos.
As one example, "Shared taxis" – and known just as that – have been operating
in Mumbai, India, since the early 1970s. These are more like a point to point
service that operates only during the peak hours. During off peak hours, they ply
just like the regular taxis, can be hailed anywhere on the roads, and passengers are
charged by the meter. But in order to bridge the gap between demand and supply,
during peak hours, several of them operate as Shared Taxis, taking a full cab load
of passengers to a more or less common destination. The pick-up points for these
taxis are fixed, and are marked by a post that says, “Shared Taxis” and cabs line up
at this point during peak hours. They display the general destination they are
headed for on their windscreens, and passengers just get in and wait for the cab to
fill up. As soon as this happens – which takes less than a couple of minutes – the
cab moves off. Fares are a fixed amount – fixed between the Taxi Unions and the
authorities for the point to point distance – and are far lower than the metered fare
to the same destination, but higher than the bus or train fare. Time taken is
obviously much less than that by bus. These taxis are very popular because of the
lack of waiting time, faster journey speeds, greater comfort, and absence of the
crush loads of peak hour commuter traffic in buses and trains. Generally, the taxi
drivers choose the locality that they live in, in the suburbs as the destination in the
evenings, and in the mornings, the destinations are always the CBD in South
Mumbai."
11
HOW OLA&UBER TRANSFORM THE INDIAN TAXI
INDUSTRY
We all know about Uber and OLA and their deep discounts for market penetration.
What is the aim behind giving discounts? It's acquiring customers. Let's have a
look at why they have had a customer acquiring spree in India in the last few years:
Low car ownership: As of 2015 India sits in 144th position in the number of cars
12
owned per 1000 people in the country. The figure being a measly 32 per 1000
citizens. India's rank in the car ownership index slipped from 128th in 2011 to
144th in 2013. Most of them don't even own a two-wheeler, this has created a
demand for cabs for their travel requirements. Online cab service providers are
providing better and prompt services to meet this demand.
Non-availability of good cab service: Before the OLAs and Ubers took over
Indian market there was a dearth of good cab service. There was a time in cities
like Mumbai and Delhi when one had to wait for 40 minutes to get a taxi. Owing to
high demand and betterment in the quality of cabs, the organized taxi market is
growing at a rate of 25 to 30% on a yearly basis. Online cab players are benefiting
from this goldmine of an opportunity.
14
Are the yellow/kaali-peeli taxis being driven to extinction by online players?
Better facilities to Drivers: "Customer is god", we all know that but these online
players also strive to keep their driver-partners happy. They do so by providing
free training and health check-ups. Bonuses and incentives are also provided with
the monthly salary of some driver-partners reaching Rs 85000 at peaks. The
companies know that if they kept their drivers happy then in turn the riding
experience will be better and that will translate into higher brand value.
As of July 2017, Uber had 4.5 lakh driver-partners registered with them, whereas
OLA had 8 lakh driver-partners.
15
Increase in Fleet Utilization: In the taxi business, it is necessary to reduce the
non-paid distance when the taxi is running empty without a customer. Normally for
a traditional taxi/radio taxi the non-paid distance is 40 to 60 % of the total distance
traveled in a day.
The online cab hailing services are using new technologies, real-time algorithm
and superior data analytics to optimize fleet utilization. Thus, they are reducing the
non-paid distances of a cab. That's why you can often hear a driver-partner telling
the customer he can't come to the customer's location if the distance between his
present location and the location of the customer is too large. On an average a
driver-partner clocks 8 to 10 rides a day with an average fare of Rs 200 with both
the players.
Offering Service for All Segments: Both of these companies have a lot of options
in their cab facilities. Each segment facilitating to a different stratum of the
customers. Like you can get a gang of 6 people and book an Uber SUV or a
OLA prime SUV and cruise away. This is simply not possible when you have
an ambassador army representing the traditional taxi players. Thus, the online
players are adding new dimensions to their service. OLA even has auto-
rickshaws for those short trips tailor made for the Indian customer's
requirements.
OLA Uber
Launch 2010 2009 (2013 in India)
Valuation 3 billion $ 62.5 billion $
Fundraising 1.75 billion $ 11.56 billion $
Key investors Softbank, Tiger Benchmark, Baidu,
global, DST Saudi Arabia's public
16
OLA Uber
investment fund
Tech platform Application Application
Presence in number of
110 29
cities in India
Number of vehicles on
550,000 350,000
platform in India
Market share in India Around 65% Around 35%
Number of employees
8000+ 200+
in India
I being a commuter will always look for better service quality of a brand. Same
goes for the mentioned online players. No matter how much capital infusion,
investor backing, valuations these two aggregators have, if they cannot provide a
good service on any given day to any customer, then that customer might switch
instantly to the competing online cab service as switching cost is virtually nil in
this case. Convenience and safety is the name of the game in the online cab service
business.
17
RESEARCH METHODOLOGY
Now let's take a look at each of the different research methods in detail.
18
The Experiment
An experiment is a research method for investigating cause and effect under highly
controlled conditions. When conducting an experiment, researchers will test
a hypothesis. A hypothesis is a statement of how two or more variables are related.
For example, let's say we wanted to examine whether studying affects a person's
GPA. Our hypothesis might be: the more a person studies, the higher a person's
GPA will be. In this example, studying would be the independent variable (the
cause); while a person's GPA would be the dependent variable (the effect).
If we wanted to test this hypothesis, we would randomly assign subjects into two
groups. The experimental group is a group of individuals that are exposed to the
independent variable. The control group, on the other hand, is not exposed to the
independent variable. We would require that the control group doesn't study at all,
but that our experimental group has to study at least 10 hours a week. After one
semester, we would then determine which group has the higher GPA. If the
experimental group has a statistically higher GPA, we can assume our hypothesis
is correct.
19
Survey Research
A survey is a research method in which subjects respond to a series of statements
or questions in a questionnaire or an interview. Surveys target some population,
which are the people who are the focus of research. Because populations are
usually quite large, the researcher will target a sample, which is a part of a
population that represents the whole.
Once our sample is selected, we need a plan for asking questions and recording
answers. The most common types of surveys are questionnaires and interviews. A
questionnaire is series of written statements or questions. With an interview, the
researcher personally asks subjects a series of questions and gives participants the
freedom to respond as they wish. Both questionnaires and interviews can
include open-ended questions (allowing the subjects to respond freely), or close-
ended questions (including a selection of fixed responses).
20
Objective: To understand the commuter perception (safety, comfort, reliability,
price elasticity)
Research Design: The study was exploratory in nature with survey method being
used to complete the study.
Sample size: For conducting my research total sample size was 100
Sources of data collection: The study was conducted based on both the primary
and secondary sources of information.
Primary sources: I had gathered primary data from the customers by providing
questionnaires to those customers who were interested in participating in the
survey.
Secondary sources: Articles of ola and Uber, through website of cab services,
Newspaper, Journals and other published sources.
21
Tools used for data collection: A self-designed question was used for the
evaluation of factors revealing customer’s perception towards effectiveness of
these cab services with respect to safety, comfort, pricing and many more.
Questionnaire
Q1.Gender
22
Gender
men men
women women
52% 48%
Out of 100 respondents, 48 Men and 52 women were the one who had participated
in the survey.
Q2.Age
23
Age
4%1%
0-20
21-40
41-60
94%
Out of 100 respondents, 94 people lies in the age group of 21-40, and 5 people lies
in the age group of 41-60 and only 1 person found to be in the age group of 0-20 in
this survey.
Q3.Occupation of Respondents
24
Occupation
3% 11%
55%
Out of 100 respondents, 55 people found to be the students ,30 people comes out to
be salaried ones and 11 was the salaried one and 4 were others.
25
Ways
Mobile Application
Others
100%
All the 100 respondents used the mobile application for booking a cab, which
implies in today era people are more mobile friendly.
26
Often
11% 3%
Daily
33% Weekly
Monthly
Others
53%
Out of 100 respondents 53 people were the one who book a cab on monthly basis,
and 33 people comes out to be in the category of booking a cab on weekly basis.
and 11 comes out to be who book a cab occasionally, and only 3 people found to
be the one who book a cab every day.
27
Easiness in booking a cab?
3%
Easy
34% Neutral
Difficult
63%
Out of 100 respondents 63 people found booking a cab was easy, 34 people were
the one who found booking a cab was neutral and 3 people was the ones who
found it difficult.
28
Demand on cab
3%
Ola
Uber
46% 51% Others
Out of 100 respondents 51 people opted for ola and 46 opted for uber and only 3
people was the one who opted other than ola and uber.
29
Reliability of cab services?
1%
Ola
47% Uber
52% Others
Out of 100 respondent 52 people found the reliability of Ola, 47 people found the
Uber services reliable and only 1 person found the other cab services reliable.
60
50
40
30
20
10
0
Excellent Good Satisfactory Bad
Out of 100 respondents 15 people found the cab service to be excellent, 55 was the
one who found good and 25 people were satisfied and only 5 had the bad
experience of cab services.
31
Driver Behaviour
60
50
40
30
20
10
0
Driver asking for Driver not able to Driver speaking Driver behaving
location and navigate using GPS loudly while driving rudely
cancelling the ride
Out of 100 respondents 55 people did not like behaviour of driver of not able to
find the location and then cancelling the ride, 28 were the one who did not like the
incompetence of driver of not able to navigate using GPS. And 7 people did not
like the driver speaking loudly while driving a car and 10 people was the one who
did not like driver behaving rudely with them.
16% Yes
7% No
Dont know
78%
Out of 100 respondents 77 people consider the cab services value for money, 7
people consider it no and 16 people were the one who don’t know whether the cab
services was value for money or not.
33
Out of 100 respondents 45 people were the one who agreed to point of government
interference with the fares of cab services, 37 people said that government should
not interfere and 7 people don’t care they are ready to pay the price demanded by
these cab providers.
34
Out of 100 respondents 70 people did not find any issue in cashless transaction, 10
faced issue in Ola, and 7 said they find issue in Uber while paying another 9 people
said they faced the issue of cashless transaction in both the cab services.
35
Observation: The observation is in the favor that customers are satisfied with the
overall performance of the cab services. Through the above analysis and
interpretation, it is clearly stated that customers are satisfied with the services of
these cab providers.
It has been observed that majority of the customers who had participated in
the survey belongs to youth segment consist of 21-40 age group.
100 % of the respondents used the mobile application for booking a cab,
which implies people are more mobile friendly. Which could be added
advantage to the cab providers as they can add the feature of booking more
than one cab at a same time. Which can be used by users for their parents or
for any other person who might not able to do it due to technology issue, or
due to lack of knowledge of how to use it. By adding feature company
revenue will be double as booking will get double at the same time.
Only 3% of the respondents found to be the one who book a cab on daily
basis, which implies we need to shift our focus to attract the other segment
who are working class. As they are regular goers so companies should make
the services of reaching time more reliable for working population as for
them reaching their destination on time is on the top priority.
51% of the respondent’s book ola, it is because availability & variety of ola
transport which consist of cars & auto rickshaw is more than Uber.
Ola and uber comprises of 5,50,000 & 3,50,000 transportation vehicles
respectively with presence in only 110 cities, Delhi’s population is approx,
2.8 crores so their vehicles in comparison to Delhi’s population are very
36
few. In order to improve their services both the companies should increase
their vehicles, so that people can avail the cab facility more frequently.
Out of 100 respondents 77% people found the money to be valuable charged
by these cab providers, 7 % do not find and 16% don’t know which implies
total 23% of the people don’t consider the money valuable. So, there is a
scope for companies to improve their pricing policy which will help people
to find it valuable, & it will lead the benefit to the companies in the long
term.
As majority of the people said yes for the government interference in the
fares, which implies people want a stable pricing whether they are availing
ola or uber services.
As majority of respondents are satisfied with cashless transaction. which
implies customers are in support of cashless payments, so companies should
promote.
37
CONCLUSIONS
38
SUGGESTIONS
LITERATURE REVIEW
39
Call taxi system in India has
grown significantly in India and
infrastructure growth, growth of
middle class,
increasing disposable incomes
and growing GDP are some of
the factors responsible. The rise
of the BPO
industry is one of the reason to
growth of this sector because of
odd working hours. This growth
can be seen
more in metropolitan cities
of India (Rahman, 2014)
40
and there is intense
competition among various
operators like Ola, Uber, Radio
cabs, Yellow cabs and Meru
etc. So to sustain in this
competitive market it is
necessary to understand the
users of the rental cab service.
Various studies and researches
have been done to
understand the factors important
while choosing a rental car.
Call taxi app (CTA) helped in
increasing perceived usefulness,
41
ease of use, playfulness and
subjective norms
(Peng et. al.,2014).This also
helps in convenience of tracing
user and service provider (Chen
,2014). A study
by Lu et al (2015) suggested
that self- service mobile
technologies give control to
commuters to access lot of
information with the help of
technology. Horsu and Yeboah
(2015) had revealed in their
study that driver
42
behavior have negative
correlation on customer
satisfaction in Ghana. Other
variables continuous service,
comfort, reliability and
affordability have an impact on
customer satisfaction with
regard to minicab taxi.
One study by Paronda et al
(2016) identified the key
performance indicators of
conventional taxis which
includes reliability, travel
speed, passenger expenses and
43
quality of service. Study based
on surveys for 30
days concluded that Uber and
GrabCar offers better quality
services than conventional
taxis.
Call taxi system in India has
grown significantly in India and
infrastructure growth, growth of
middle class,
increasing disposable incomes
and growing GDP are some of
the factors responsible. The rise
of the BPO
44
industry is one of the reason to
growth of this sector because of
odd working hours. This growth
can be seen
more in metropolitan cities
of India (Rahman, 2014)
and there is intense
competition among various
operators like Ola, Uber, Radio
cabs, Yellow cabs and Meru
etc. So to sustain in this
competitive market it is
necessary to understand the
users of the rental cab service.
45
Various studies and researches
have been done to
understand the factors important
while choosing a rental car.
Call taxi app (CTA) helped in
increasing perceived usefulness,
ease of use, playfulness and
subjective norms
(Peng et. al.,2014).This also
helps in convenience of tracing
user and service provider (Chen
,2014). A study
by Lu et al (2015) suggested
that self- service mobile
46
technologies give control to
commuters to access lot of
information with the help of
technology. Horsu and Yeboah
(2015) had revealed in their
study that driver
behavior have negative
correlation on customer
satisfaction in Ghana. Other
variables continuous service,
comfort, reliability and
affordability have an impact on
customer satisfaction with
regard to minicab taxi.
47
One study by Paronda et al
(2016) identified the key
performance indicators of
conventional taxis which
includes reliability, travel
speed, passenger expenses and
quality of service. Study based
on surveys for 30
days concluded that Uber and
GrabCar offers better quality
services than conventional
taxis.
Call taxi system in India has
grown significantly in India and
48
infrastructure growth, growth of
middle class,
increasing disposable incomes
and growing GDP are some of
the factors responsible. The rise
of the BPO
industry is one of the reason to
growth of this sector because of
odd working hours. This growth
can be seen
more in metropolitan cities
of India (Rahman, 2014)
and there is intense
competition among various
49
operators like Ola, Uber, Radio
cabs, Yellow cabs and Meru
etc. So to sustain in this
competitive market it is
necessary to understand the
users of the rental cab service.
Various studies and researches
have been done to
understand the factors important
while choosing a rental car.
Call taxi app (CTA) helped in
increasing perceived usefulness,
ease of use, playfulness and
subjective norms
50
(Peng et. al.,2014).This also
helps in convenience of tracing
user and service provider (Chen
,2014). A study
by Lu et al (2015) suggested
that self- service mobile
technologies give control to
commuters to access lot of
information with the help of
technology. Horsu and Yeboah
(2015) had revealed in their
study that driver
behavior have negative
correlation on customer
51
satisfaction in Ghana. Other
variables continuous service,
comfort, reliability and
affordability have an impact on
customer satisfaction with
regard to minicab taxi.
One study by Paronda et al
(2016) identified the key
performance indicators of
conventional taxis which
includes reliability, travel
speed, passenger expenses and
quality of service. Study based
on surveys for 30
52
days concluded that Uber and
GrabCar offers better quality
services than conventional
taxis.
Call taxi system in India has grown significantly in India and infrastructure growth,
growth of middle class, increasing disposable incomes and growing GDP are some
of the factors responsible. The rise of the BPO industry is one of the reasons to
growth of this sector because of odd working hours. This growth can be seen more
in metropolitan cities of India (Rahman, 2014) and there is intense competition
among various operators like Ola, Uber, Radio cabs, Yellow cabs and Meru etc. So
to sustain in this competitive market it is necessary to understand the users of the
rental cab service. Various studies and researches have been done to understand the
factors important while choosing a rental car.
Call taxi app (CTA) helped in increasing perceived usefulness, ease of use,
playfulness and subjective norms (Peng et. al.,2014).This also helps in
convenience of tracing user and service provider(Chen ,2014).A study by Lu et al
(2015) suggested that self- service mobile technologies give control to commuters
to access lot of information with the help of technology. Horsu and Yeboah (2015)
had revealed in their study that driver behavior have negative correlation on
customer satisfaction in Ghana. Other variables continuous service, comfort,
reliability and affordability have an impact on customer satisfaction with regard to
minicab taxi. One study by Paronda et al (2016) identified the key performance
indicators of conventional taxis which includes reliability, travel speed, passenger
53
expenses and quality of service. Study based on surveys for 30 days concluded that
Uber and Grab Car offers better quality services than conventional taxis. For
Indian market similar studies have been done, a research by Hanif and Sagar
(2016) suggested that cab services has a huge potential for growth in Mumbai
targeting middle and affluent class. Consumer not only use cab service for
commutation but also for visiting a shopping mall, attending late night party or
going out on special occasion. Study also showed that customer satisfaction level is
very high, showing positive sign for future growth and expansion of business.
Aggregator taxi companies ‘s tied up with the mobile wallets companies like Free
Charge, PayTM, Mobikiwiki which helped in providing hazel free ride to
customers by providing customers easy payment options with offers and discounts
for rides(Kavita and Rajeswari ,2016).Consumer’s preference for online
transaction push Uber to create taxi service portal as well as Uber is also started
spending on various marketing strategies and information technology.
Ruchi et al (2017) studied various factors of dynamics of Indian taxi markets such
as pricing, their revenue models, market share etc. Utsav Pandya et al (2017)
identifiedtechnology trends, safety, and price, ease of availability, comfort and
payment option affecting public taxi market. Sarit Prava Das et al (2017) identified
convenience, quality services, transparency and safety as most important
parameters for selecting pre booked taxis. A study by Kumar and Kumar (2016)
showed that consumers were interested to redeem coupons while selecting cab
services and were comfortable to redeem coupons through mobile apps while
booking cab services.With customers, service providers are also important in any
service industry, in this regard a research by Ruchika Malik (2017) identified that
retaining drivers by initiatives like monetary awards of influence customer
decision. Ola is using reward systems to motivate their drivers thus motivating
54
them as well as involving them in resolving the customer grievances to build a
loyal base of drivers. On other side Uber offers rewards and discounts under their
Uber CLUB program. This program is not only design impact drivers but is also
designed to help their family by providing them various offers related to
automobile insurance, vehicle maintenance, lifestyle, health and wellness to their
everyday life. There are three categories Silver, Gold and Diamond, based on the
quality and performance of each driver. One more comparatively study of Ola and
Uber by Allamdas Rohit H. (2017) suggested that as Indian consumers and highly
price-sensitive and very less brand loyal, companies need to design new packages
to attract new customers and to keep existing customers. Similar research by
Shukla et al (2017) on OLA and UBER suggested, to adopt highly innovative and
customer-centric strategies to increase market share
Therefore, it would not be that easy for both the companies Ola and Uber to
operate in an environment which has to be more customer-centric & target
oriented, highly innovative, and have resistant to pressure from the regulatory
authorities and keep delighting their customers.
OLA
India seems to be going through a probable „Taxi‟ revolution. Every other day,
there is a new start up offering efficient and economical cab service to the citizens
operating urban and rural lifestyles. Travelling within the city has always been a
curse for many individuals, especially for those living in crowded cities like Delhi,
Mumbai, Bangalore, etc. While the local trains emerge as an alternative to shelling
out cash for fuel and waiting in bumper-tobumper traffic in cosmopolitan Mumbai,
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the danger of travelling by these trains is innumerable. The distances in Bangalore
crush the spirit out of anyone who loves to drive while the traffic makes driving
your own vehicle in the city terrible. Ola Cabs is a taxi service that was started in
2010 in Mumbai to solve the city’s transport setback. ANI Technologies Pvt. Ltd.,
functioning under the trade name Ola, is an Indian online transportation network
company. Founded as an online cab aggregator in Mumbai, Ola is now based in
Bangalore. As of September 2015, it was valued at $5 billion. Ola cabs has
completely revolutionized the way India travels, and is favorite with almost
everyone, given its convenience, efficiency and how it allowed us to save the daily
arguments and haggling with the auto and cab drivers who refuse to go by the
meter. Founded on 3rd December 2010 by Bhavish Aggarwal (currently CEO) and
Ankit Bhati, Ola, as of 2014, had expanded to a network of more than 200,000 cars
across 100 cities. In November 2014, it expanded to incorporate autos on-trial
basis in Bangalore. Post the trial phase, Ola Auto has expanded to other cities as
well like Delhi, Pune, Chennai and Hyderabad and Kolkata starting December
2014 while in December 2015, Ola expanded its auto services in Chandigarh,
Indore, Jaipur and Guwahati, Visakhapatnam. OlaCabs acquired Bangalore based
cab service TaxiForSure for about $200 million in March 2015. From the 25th of
June 2015, Ola users have gained access to TaxiForSure cabs via the Ola mobile
application. By November 2015, to strengthen its new bus-shuttle service, Ola had
acquired as well, a trip-planning applications company, for an undisclosed sum.
Ola provides different types of cab services to its customers ranging from
economic to luxury travel. The cabs can be reserved through a mobile application.
It supports both cash and cashless payment options with Ola money. Ola claims to
clock an average of more than 150,000 bookings per day and commands 60% of
the market share in India.In November 2014, Ola also started on-demand auto
rickshaw service through its mobile application in Bangalore, Pune and few other
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cities in India Taxi can be booked either through website or through a mobile
application that is available for download on Google Play Store and The App
Store. For this, Customers need to create a unique user name and password. The
mobile app, by far, is the simplest way to book an Ola Cab. The customer simply
needs to turn on their GPS setting and then open Ola application, which indicates
all available cabs near that location. Customers then have two options available:
picking up the cab right then or booking one for a later date. Ola Cabs offer
services ranging from the economy level to the ultimate luxury. The mini cars,
most popularly a Tata Indica, are the cheapest service offered and can seat
maximum 5 people. Sedan is also offered for a slightly higher price, and then
SUVs usually recommended for 6 to 8 people.
The business class has the option of availing prime high-end cars, which completes
the luxury level. The latest development from Ola is the introduction of new Ola
Autos. The frequency of these autos is much higher than the usual Minis and
hence, most of the time, customers can find an auto within two minutes. This
service was started on a trial basis in Bangalore in 2014 and now has been
expanded to cities like Chennai, Delhi etc after the trial proved successful. Easy
accessibility and convenience are the terms that are synonymous with Ola Cabs.
The option of cashless payment using the Ola Money facility and its unique
referral program are few characteristics that have helped this company
revolutionize the new local transport in India.
Strengths
Grabbed the First mover advantage as a taxi aggregator in India
Acquired Taxi for Sure which made it No. 1 in India
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High awareness among public due to aggressive TV, online and print media
marketing techniques.
Huge customer base & due to network effect it is increasing
Rapidly expanding and online application
Multiple rounds of venture capital investments have made the brand financially
strong.
Weaknesses
Drivers are the face of the company and hence their misbehavior directly affects
its brand image.
Monetization is very difficult as the demand is huge. amount of cash burning is
huge.
Opportunities
Potential is high as Unorganized market is huge (~90%)
Increasing internet penetration &Smartphone users
Rising disposable income of the people
Huge demands as the customers look for more and more convenience in terms of
hassle free drive and no tension of finding parking.
Threats
New competitors entering the market.
Uber has deep pocket and hence can burn cash heavily
Presence of many national players in the market
Future is unclear due to lack of government regulations in developing countries.
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Uber
Headquartered in San Francisco, California, Uber Technologies Inc. is an
American worldwide online transportation network company. Founded as UberCab
by Garrett Camp, the founder of StumbleUpon, and Travis Kalanick in 2009, it
develops, markets and operates the Uber application, allowing consumers with
smartphones to submit a trip request, which the software program automatically
sends to the Uber driver nearest to the consumer, alerting the driver to the location
of the customer. As of August 2016, Uber provided its cab services in over 66
countries and 545 cities worldwide. The Uber application automatically calculates
the fare and transfers the payment to the driver. Since its launch, many other
companies have replicated Uber‟s business model.” The legality of Uber has been
challenged by the government and other taxi companies, who allege that drivers
who are not licensed to drive taxicabs which is unsafe and illegal. Also, some taxi
driver unions have called Uber drivers "pirate taxis". However, it is now common
for taxi drivers to as well to work for Uber; especially during "surge" periods when
they have high chances of earning multiple times what they would have under the
taxi umbrella. The company received $200,000 in seed funding in 2009. In
additional funding, Uber raised $1.25 million in 2010. Following a beta launch in
summer of 2010, Uber's services and mobile application officially launched in San
Francisco in the year 2011. Initially, Ryan Graves was appointed as CEO,
however, Kalanick replaced him in the role later that year and Graves stepped
down to become the company's COO. By the end of 2011, Uber had raised $44.5
million in funding and in the same year, the company changed its name from
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UberCab to Uber. Uber has emerged to be the leader of the “Sharing Economy”.
The sharing economy uses immobilized assets and turns them into services
(Lieberman et al., 2015). This sharing economy can mobilize the productivity of a
million individuals. In the case of Uber, ‘willing’ drivers are matched with paying
customers looking for rides, hence Uber is being labeled as a “ride-sharing” service
by many. (Chen, Mislove, & Wilson, 2015) Uber is well known to be the taxi
industry’s “disruptor”. Whether people like it or not, Uber is starting to win the
taxi passenger market. But once a taxicab company or group had a lock-in off all
taxicabs in a given jurisdiction, it had little incentive to modernize or innovate its
services. Jurisdictions also have rules preventing drivers to switch companies. By
controlling the number of taxicabs in an area, the systems guarantee work and
promises drivers with a living wage. The trade-off with a small wage is job
security. These limitations ensured drivers that they have enough work to make a
living (Liss, 2015). May 2015 marks as a historical month for Uber and app-based
transportation services in general making it legal for companies such as Uber to
operate anywhere in the country. According to Department of Transportation and
Communications secretary Jun Abaya.
Strengths
well-recognized brand
Unlimited fleet of vehicles available. Regular Taxi service regulations are not
applicable for Uber.
Operational cost is quite low. As it relies on customer-to-driver interaction, a
dispatcher is not needed
Very little competition.
Dual rating system boosts safety and trust.
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Convenient system for the drivers. They can work for flexible hours and can even
choose to be a part-time employee. Drivers can also reject unwanted clients
Lower prices as compared to traditional taxi operators.
High valuation of Uber encourages many people to invest in it.
Weaknesses
Easily imitable ides. Nothing will prevent competition from presenting the same
product/service.
Ethically questionable between Uber and the drivers. It is expected that loyalty
between Uber and its drivers is quite low as it lacks real connection.
Uber and its customers have no bonding. Incentive remaining with Uber is low.
Cost of operating vehicles is very high. But, the drivers do not earn much.
There are privacy concerns.
Opportunities
Customers are often dissatisfied with traditional cab companies because of their
high prices and long waiting time and hence can exploit new and big markets in
countries like India.
Can tap growing markets in suburban areas where taxi services are not available.
Estimated Time of Arrival can be reduced with rise in the number of Uber drivers
which in turn will make Uber more liked by the customers and hence, the startup
will get more revenue and drivers will also be profited.
Cheaper electric cars can be used which will reduce the cost and increase the
driver’s profit margin.
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Threats
Low-profit margins causes dissatisfaction among the drivers. This might lead to
bad publicity, which can in turn discourage the new drivers from joining Uber.
Increasing competition will ultimately decrease prices. This will discourage
drivers from joining the startup in new markets, resulting in loss of customers.
Ultimately, Uber‟s revenues will decline.
As new markets and drivers are joining, fraud and scandals are also increasing.
It’s damaging for the brand.
Self-driving cars, e.g. Google Cars, can probably eliminate the need for Uber.
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LIMITATION OF THE STUDY
In spite of every care taken on the part of the researcher there were certain
limitations which could not be overcome and are as follows:
• Some of the persons were not so responsive.
• Possibility of error in data collection because many of customers may have
not given the actual answers of my questionnaire.
• Sample size is limited to 5 people only. The sample size may not adequately
represent the whole market.
• The research study was confined to Delhi only.
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Ola vs. Uber: The latest score in the great Indian taxi-
app game
Six years into their fierce rivalry in India, call-taxi majors Ola and Uber are still
trying out various routes to seek dominance in the $10 billion market.
Over the past year, Ola, the Bangalore-based unicorn, has sought to take the fight
abroad. In January 2018, the Softbank-backed company made its first overseas
foray to Australia, and by the end of the year, it had entered the UK and New
Zealand as well. In October 2018, Ola also raised $400 million (Rs2,843 crore),
which news reports said was part of a $2 billion mega funding that it was putting
together.
However, Uber’s not been a mute spectator during this time, though the San
Fransico-based firm’s chosen to work more behind the scenes to build a strong
base for the future.
Uber good
When Uber entered India in 2013, Ola already had a three-year head start. And
over the years, Uber has faced a slew of adversities from sexual assault
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allegations against drivers to homegrown startups playing the nationalism
card, calling for protectionist laws.
As per the latest data, Uber is a clear winner among Indian drivers. The number of
Uber’s driver app installs is way higher than Ola now, which could prove to be a
massive advantage for the US firm in the long run.
“The taxi industry is all about availability. If more drivers go to Uber than to Ola,
it shows you drivers trust Uber more, and Ola should worry about that,” said Aman
Kumar, chief business officer at market research firm Kalagato.
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Both ride-hailing giants—Uber and Ola—are largely undifferentiated in their
offerings so “there is very little to choose from and now the important thing is from
the supply side (drivers, cars) than demand,” said Yugal Joshi, vice-president at
Texas-based advisory Everest Group.
While Ola is making big headlines with its global expansion and acquisitions, Uber
has been firming up its technological backbone, experts said.
For instance, the company has been aggressively ramping up its technology team
in India. In December, Uber said, it will double the size of its tech teams
across Bangalore and Hyderabad. At the time, the company had 500 engineers
working in the two teams. “We see immense potential in India’s tech talent and
have been expanding our India tech presence since the start of this year,” Apurva
Dalal, head of engineering, Uber India, said in a press release on Dec. 08, last year.
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“In 2018, our tech teams grew by 150% and we are focused on doubling down
again in 2019.”
Besides, Uber has also brought some of its global offerings to India and used
innovation to solve problems that are specific to this country.
On Jan. 30, UberBOAT was launched in Mumbai for short trips from the Gateway
of India jetty to Alibaug and other islands around—its first major announcement in
India in months. And in June 2018, Uber launched a pared-down version of its
app, Uber Lite, in the country that struggles with poor internet speeds.
In some cases, the efforts seem to be minor but could benefit in the long run. “For
example, Uber launched UberAssist in India for differently-abled passengers. Not
that this will move the revenue needle for it, but it still indicates a willingness to
innovate,” Everest Group’s Joshi said.
Among the customers who do use Uber, they are more likely to recommend it to
others than Ola’s customer base is. Uber’s payment terms and general quality of
customers is better, experts told Quartz.
The US-based company has also repeatedly said that India is a priority for it. In
February 2018, CEO Dara Khoshrowshahi said Uber plans to grow its presence
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manifold in India. Then, in September, COO Barney Harford reiterated the firm’s
intentions of doubling down on India-focused investment.
The $4.3 billion Ola operates in nearly 125 Indian cities, offering cabs, auto
rickshaws, and even two-wheelers. And that is one metric that puts it far ahead of
Uber, whose services are available only in just 36 cities.
That explains the wide gap between the shares of Indian Smartphone holders using
the two apps.
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For months now, Ola has been ahead of Uber in terms of the number of times their
apps have been installed in India. However, app installs don’t necessarily indicate
customer preference. Ola’s presence in more cities is likely what’s giving it an
edge, experts say.
However, more than 80% of Ola’s business comes from its top metro cities, so the
data may indeed signal customers favoring the app.
It’s possible that the number of devices that used to have the Uber app and now no
longer do is higher because at times, people would have downloaded the app to
realize that Uber isn’t available in their region.
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Going forward, both Uber and Ola will each continue to innovate and deliver a
wide array of services, experts believe. These could include launching multiple
modes of transport and the push in the food-delivery sector, among other things.
But despite the efforts on all fronts, regulatory hurdles could rear their heads soon.
“There is increasing noise that these aggregators have made transport problems
worse in places where there is meaningful public transport. Though Indian cities
lack public transport in general, still these aggregators are making the transport
scene messier,” said Joshi, speaking about how little taxi services help
India’s congestion and pollution problem. “Most cars take one or two passengers
and occupy large space despite crowd on the Indian roads. Therefore, the public
agencies at some point may start putting transport penalty tax on such aggregators
which may further damage the market.”
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Business Modules of OLA and UBER
UBER:
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72
OLA:
73
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Career
OLA:
OLA believes that innovation is a part of our DNA and every employee
embodies Ola's larger goals and values. We encourage all our employees to
practice the utmost creative freedom in everything that they do, allowing for
ground-breaking ideas, innovation and steady advancement.
Impact oriented
If you are oriented towards making an impact, then Ola is the place for you! As
an organization, we focus on working fast and hard to make a quick impact.
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Passionate
We are passionate about our mission to provide mobility for a billion Indians.
What's more? Once we are done with work we party even harder!
Ambitious Goals
We believe in the saying "Ambitious goals make for outstanding achievements"
and we set audacious goals for ourselves.
Obsessively hyperlocal
We intrinsically understand the transportation needs of India. Our teams
continue to create hyper local solutions to meet those needs.
Infectious Energy
There is never a dull moment at Ola. We are constantly ideating, innovating
and deliberating! Join us to be part of this buzz.
Enterprising
We have the courage to be creative and always willing to experiment with new
opportunities!
UBER
At Uber, we’re reimagining the way the world moves. From how you get home
from work, to how you eat meals, or how you move huge shipments of anything,
the work we do is shaping the future of mobility and changing the way people live.
To get there, Uber brought together a collective of optimists and doers to tackle
some of the most challenging problems of our time.
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Uber believe in learning by doing—and that there is no better classroom than real-
world experience. Join us to move yourself—and the world—forward.
Why Uber
Cultural Norms
Its eight cultural norms embody our mission, values, and how we work together at
Uber.
Creative problem-solving
They enjoy working on hard problems together because the hardest challenges are
often the most rewarding.
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BIBLIOGRAPHY
http://www.pbr.co.in/March%202017/11.pdf
https://soapboxie.com/economy/How-Uber-and-OLA-transformed-the-
Indian-taxi-industry.
https://economictimes.indiatimes.com/industry/auto/news/auto-
components/taxi-market-to-account-for-15-17-per-cent-of-indian-pv-market-
by-2020/articleshow/57432718.cms
http://shodhganga.inflibnet.ac.in/bitstream/10603/33699/7/07_chapter2.pdf.
http://www.iosrjournals.org/iosr-jbm/papers/Conf.17001-2017/Volume-
1/11.%2073-78.pdf
https://qz.com/india/1545042/ola-vs-uber-the-latest-score-in-the-great-
indian-taxi-app-game/
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QUESTIONNAIRE
Name:
Your answer:
Gender
Male
Female
Others
Age
1-20
21-40
41-60
60&above
Occupation
Self- Employed
Salaried
Freelancer
Student
Retired
others
Q1. Have you ever availed the cab services?
Yes
No
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Q2. How do you normally book a cab?
By calling a taxi company
Company Website
Mobile Application
Q3. How often do you book a cab?
Daily
Weekly
Monthly
Others
Q4. How easy was it to book a cab?
Easy
Neutral
Difficult
Q5. Which on demand cab service do you use?
Ola
Uber
Others
Q6. Which cab services do you find more reliable?
Ola
Uber
Others
Q7. How do you find the above chosen cab service?
Excellent
Good
Satisfactory
Bad
Poor
Q8. What do you find disturbing the most while riding?
Driver asking for location and cancelling the ride
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Driver not able to navigate using GPS
Driver speaking loudly while driving
Driver behaving rudely
Q9. Was it value for money?
Yes
No
Don’t know
Q10. Should the Government interfere with fares?
Yes
No
I really don’t care, I will pay.
Q11. Has cashless transaction been a problem?
No, I have not faced any issue yet
More often in Ola
More Often in Uber
Yes, equally in both
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HOW TO BOOK OLA/UBER:
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