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A Comparitive Study On Consumer Perception of Online Cab Services (Project Report) Vardaan Srivastava
A Comparitive Study On Consumer Perception of Online Cab Services (Project Report) Vardaan Srivastava
On
This is to certify that the Project Report titled “____________________”is an academic work done by
“__________________” submitted in the partial fulfillment of the requirement for the award of the
degree of BBA at Delhi Institute of Advanced Studies, Delhi, under my guidance & direction.
To the best of my knowledge and belief the data & information presented by him/her in the project has
Signature :
I would like to express my gratitude to all those who gave me the possibility to complete this project.
I am deeply indebted to my guide Ms. Khushboo Taneja from Delhi Institute of Advanced Studies
whose help stimulating suggestions and encouragement helped me in all the time of research and
writing of the project.
The learning was immense and valuable.
This is to certify that I have completed the Project Report titled “A Comparative Study of
Consumer Preferences of Online Cab Booking Services (OLA & UBER CABS)” under the
guidance of Ms. Khushboo Taneja in partial fulfillment of the requirement for the award of Degree
of BBA at Delhi Institute of Advanced Studies, Delhi. This is an original piece of work & I have not
submitted it earlier elsewhere.
Date: Signature:
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Chapter-1: Introduction to the Industry & Company
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Chapter-2: Introduction to the Topic
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Chapter-3: Research Methodology
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Chapter-4: Data Analysis & Interpretation
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Chapter-5: Findings & Conclusions
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Chapter-6: Suggestions & Limitations
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Bibliography
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Appendix
CHAPTER 1
Introduction to the Industry & Company
The industry in which Ola Cabs & Uber Cabs are dealing in is Online Cabs Industry.
India- A country known for lowest car ownership across all emerging countries found a new answer to its
mobility needs in 2013, when Taxi for sure launched its app based on-demand taxi programme. The very
same year, when Uber entered India and launched its services in Bangalore.
Till 2014, there were very few takers for on-demand taxis but a lot changed in 2015 when Ola rolled out a
much improved and accurate app with broader coverage. Till 2014 and even early 2015, Ola`s ~20%
bookings were made through laptops and desktops. India`s weak internet infrastructure and comparatively
lower smartphone penetration was prime reason behind this.
The smartphone penetration was 6% in India in 2013 and, reached 45% by May 2021. In metro cities, the
penetration reached 85-90% by Q1-2021 and that is when and where the revolution of on-demand taxis
began in India.
Among various transportation mode cab service gained popularity because of its advantage of door to door
service and now because of technological advancement customers were able to book cabs at competitive
price in just one click using their smart phones. These App based cab services were having tremendous
potential for growth in densely populated countries like India where parking is major problem because of
space crunch as well as public transports are over cowered during peak hours. Slowly this convenient mode
of travel started gaining popularity and competition became dense after Uber’s launch in 2013.
As customers have become more demanding it’s a challenging job for rental cab industry to meet the
customer’s expectations. Now a days not just the price but quality service also plays an important role in
customer satisfaction. Now using a smart phone consumer can access, compare, evaluate and purchase. In
this situations App based services such as Ola or Uber Cabs offered solution by offering various services
ranging from the economic to ultimate luxury. As per a current report in the financial express introduction
of App based pre-paid taxi services like Uber and Ola taxi not only grabbed customers’ attention but also
contributed in increasing employability by providing opportunity to drivers.
Market Segmentation
The Indian taxi market size was estimated at 1.9 million taxis estimated to generate
US$31,094m revenue in 2021.The unorganized small fleet operators account for ~91% market share in
terms of registered taxi fleet. The arrival of on-demand taxi players has helped organize this market to a
great extent.
The target user-base of on-demand taxis in India is typically urban with an income of >25,000 INR ($350)/
month. Although, with growth in share/pool rides, that income threshold has further reduced. In India, both
Ola and Uber, earn ~78% of their revenue from budget segment rides.
Apart from Meru cabs, the cab aggregators have an asset-light business model and don’t own any vehicles
of their own. They simply charge a 20-25% commission on every ride just for the match they provide
between a rider and a driver.
In 2016, Ola and Uber accounted for ~400 Million and ~260 Million rides each. By 2017, the cumulative
figure went up by 12%. In May`19, Ola and Uber had 6.9 Million and 6.3 Million Monthly active users
respectively.
The market size of on- demand taxi market in India was estimated at $XX Million in 2019 , growing at
YY% CAGR till 2025
The car manufacturers in India are capitalizing on the growing popularity of on-demand taxis. The
passenger car market leader with 51% market share in India, Maruti launched the second generation Swift
Dzire Tour in Oct `17. About 70%+ Toyota Etios is sold to commercial segment.
Hyundai now sells cars to taxi segment under Prime brand and post recent (March 2019) investment in Ola
is planning to manufacture EVs for ride hailing firms by 2021.
Uber was founded as "UberCab" in 2009 by Travis Kalanick and Garrett Camp. The Uber app software
required a smart phone. Uber was trying to build a presence in this segment in addition to its existing
business model. Since Uber's launch, several other companies have copied its business model, a trend that
has come to be referred to as "Uberification" (cf. Huffington Post, January 2015). Other startups were Ola
Cabs, Lyft, Sidecar, Haxi, Lets Ride, Pool Circle, Tripda etc.
Though limited to a niche presence, the ride sharing startups have the potential to disrupt and bring
structural changes to the industry. This model could cut costs further and serve to an entirely different
target market. By end of December 2015, the Uber service was available in 68 countries and 372 cities
worldwide
How does the on demand cabs business model works?
The customers can hire drivers using the company‘s app available on both iPhone, Android and Windows.
Once riders make a request, they receive an ETA (expected time of arrival) from the driver. When a driver
receives a request, it appears on his iPhone, along with GPS coordinates of the rider. From here on, riders
can call the driver if they need to make any special requests. Customers are required to enter their payment
information through the Company‘s app prior to requesting a car. Riders can rate their drivers with a rating
of 1 to 5, so if someone reports a negative experience, the company can discipline (or dismiss) delinquent
drivers.
Cab booking
1. Customer loads the mobile wallet with cash or stores credit/debit card details
2. Customer opens app and sets pick-up location (some apps can pick up location on their own)
3. Selects payment method
4. Selects cab type and then places the order
Cab delivery
5. Cab picks up the customer and the trip is tracked by GPS Payment
6. At the end of the trip, the fare is charged directly to the mobile wallet. In the case of cards, a customer
enters CVV and verification password on the app. Payment can also be in cash.
7. The aggregator transfers money to the driver‘s linked bank account in 24-48 hours
Uber pioneered the business model which is now replicated by other taxicab aggregators with
customization to the local countries.
In the business model, the Company is a Network Orchestrator that connects passengers with drivers i.e., it
manages a network of drivers and passengers through a phone application. It also provides options and
varieties in the transportation service.
This means that there is no ownership of fleet or cars, coordinating passengers with drivers via technology
and sharing of the ride cost.
The On Demand Cabs Business Model in a Capsule:
Driver:
Anyone with a driving license and a car can apply to become a driver in any of the covered cities. After
screening, the driver is enlisted in the system and given a smart phone. This provides a steady income to
anyone with a car without additional investment.
Passenger:
Registered users download the app to their phones and if they need a taxi, they call a taxi via the app. They
can also track the taxi on their phone as it approaches. This service is convenient for the passengers,
provides them relatively low cost comfortable service.
Company sets the taxi fares with Premium fare during peak hours and flat rate for off peak hours.
Passengers pay through their credit cards, cash or mobile wallets. The fare is based on car type, distance
and peak hour.
Company divides the fare, usually 80% to the driver and 20% to itself. Even after a 20% pay cut, the taxi
drivers earn more than the traditional taxi services.
Future Growth:
Company doesn‘t own any taxi. Because of that it can show a higher amount of its earnings as profits. The
company needs to invest in research and development for future growth. The initial reinvestment will be a
modest amount. In addition, there will be legal and regulatory issues costs.
Driver entrepreneurs:
In the study by Goutam Das (August 2015), Uber‘s global model has heralded the rise of the ondemand
economy. In this model, the driver is more an entrepreneur than an employee. He contracts his services and
is on flexible employment triggering a change in labor market dynamics.
This model is highly scalable because it is cost efficient. The responsibility rests with the driver in owning,
licensing, insuring and maintaining a car and not with the ridesharing company. The model has found
ready acceptance by the investors and has facilitated the rise of on-demand start-ups across the world and
in India. The deep pocketed investors subscribed to the approach of the on-demand companies to garner
market share and gain scale even as they made losses. The comparative table of the ridesharing companies
in the next section reflects the losses that they are making.
The app-enabled cab booking industry has managed to bring a true revolution in how taxi-cabs rides are
hailed and shared. Beginning from a pilot project back in 2010, Uber was the first company to offer
location based cab booking service in San Francisco, California, where it became an instant hit.
In India, Ola, which is the more successful cabbie service, has about 200 million customers through a
network of 2.5 million driver-partners, whereas Uber facilitated 14 million rides a week in India last year.
What allowed such an enormous growth? Let’s see the contributing factors one by one.
Cab booking services provide some additional features in comparison the traditional ways of hailing rides.
They’re fast, accurate and much more convenient, even if they are bit costly on the pocket.
Following are the factors that have prompted their growth over the years.
Quick Accessibility
If we talk about India, the Cabbie service has been unreliable in the least until aggregators like Uber and
Ola arrived on the scene. With the help of location based tracking and one-tap booking, they have reduced
the time in which a cab would come and pick you up.
From having to go out cabbie-hunting in scorching heat or heavy rains, online cab booking service picks
you up from your immediate shelter and makes sure you reach your destination all good. Something, the
traditional taxi servicers could never provide.
Ride Sharing
Ride sharing has been one of the best features to increase customer adaptability in India. Even with low flat
rates and discounted per mile price, booking a cab for a single-person use can seem costly. But with the
ability to share rides, the situation changed.
Indians, in particular, who would only choose convenience if it’s offered at an economical price, ride
sharing became the perfect fit. Ola was the first to bring the concept of ride sharing to India, after which
Uber launched it’s Uber Pool service.
Conveyance Security
When it’s stormy outside and you are stuck at your office at the end of the day, you want to make sure you
get home dry. Taking out your mobile phone to book a cab is the first thing you can think of.
These cabs provide a keen sense of security when travelling conditions are not so good and you want to be
transported safely to your destination. This factor alone serves for the success of cab aggregators in India.
Luxury
The main reason why you would choose a cab over public transport or taking out your own vehicle is the
luxury factor involved in the deal. Even if you are are a regular cab booking service user, it’ll be much
cheaper for you in comparison to hiring a personal driver, for the same level of luxury.
Further, most of the cars deployed by the aggregators have all the necessary features you need to find in a
cab such as AC, comfortable seats, secured doors and baggage storage compartments.
COMPETITIVE LANDSCAPE
Ola vs Uber is the best way to define the competitive landscape of on-demand taxi market in India. Both
unicorns, funded by Softbank have put up a relentless fight. The other players namely Meru cabs and
Jugnoo are pretty much non-existent in the overall scheme of things.
Ola and Uber has 2 million+ drivers on its platform, Ola is on track to become a holding company for
various different companies under one group. This move is widely looked at a move to boost valuation, but
we believe it is more on the lines of making the company diversified and sustainable in the long run.
As of Feb`21, Ola was valued at ~$3.3 Billion has raised over $3.8 Billion till date and about $510 Million
raised in 2019 alone.
Ola expanded internationally in England, Australia and New Zealand in 2018. Uber on the other hand has
sold its Chinese and South East Asian business to Didi and Grab respectively but is fully committed to the
Indian market.
The taxi industry in India is $ 6-9 billion size. In this industry, the organized market is 4-5%. The rest 95-
96% comprises of operators with 2 to 50 cars operating in 1 or 2 cities.
At one level, there is the rivalry between cab aggregators (like Ola, Uber) with radiotaxi operators (like
Easy cabs, Fast track, Meru cabs etc). Seeing the demand switch of the customers to taxicab aggregators,
radio taxi players like Meru are adopting a hybrid model.
At another level, there is the rivalry amongst the cab aggregator themselves. The competition is taking
place on the price since the last couple of years. Ola loses Rs 4 per km as it pays more to the driver than it
charges the customer.
As a new start up with a new business model that aims to change the existing paradigm, the focus is to gain
traction by gaining a faithful customer base with support from venture capital investors. With a dominant
market share and economies of scale, the aggregator would enjoy the advantage of more cabs with more
control in providing cars on time leading to a network effect. It is hoped then that there would be an
oligopoly and therefore profitability by charging respectable commissions and earning through customer
data & advertisements in an industry space that will not be fragmented.
However it is noticed that of late Ola stopped giving discounts/coupons to the customers expecting that the
now habituated customer will continue with the service from Ola at standard fare rates. The exhibit also
explains the peak charges that are charged during busy hours and the rationale behind the same.
INTRODUCTION TO COMPANY
OLA CABS
Ola Cabs (stylized as OLΛ) is an Indian multinational ridesharing company offering services that
include vehicle for hire and food delivery. The company is based in Bengaluru, Karnataka, India. As of
October 2019, Ola was valued at about US$6.5 billion[3] A variety of venture
capitalists including Softbank have large stakes in the company.
In January 2018, Ola extended into its first overseas market, Australia, and in New Zealand in September
2018. In March 2019, Ola began its UK operations introducing auto rickshaws in UK. More than 10,000
drivers have applied both in online and offline mode ahead of its launch in London. In February 2020, Ola
launched its taxi-hailing services with over 25,000 drivers registered.
HISTORY
In March 2015, Ola Cabs acquired Bengaluru-based taxi service TaxiForSure for approximately ₹ 1237
crore (US$ 200 million). June 2015 onwards, Ola users gained access to TFS cabs via the Ola mobile
application. Later in the year in November, Ola further acquired Geotagg, a trip-planning applications
company, for an undisclosed sum.
In a move to expand beyond cab aggregation, Ola acquired struggling foodtech company Foodpanda with
an eye on leveraging the growing food delivery segment business in December 2017. In April 2018, Ola
made its second acquisition with Ridlr (formerly Traffline), a public transport ticketing app. Later in
August 2018, Ola financed Series A funding of the scooter rent startup Vogo, and again in December,
invested another $100 million.
In March 2019, the Karnataka state transport department suspended Ola's operating license for six months
for violation of license conditions and violation of Karnataka On-Demand Transportation Technology
Aggregator Rules, 2016. This was on account of Ola running bike taxi services though it only had license
for four wheeler taxi operations. The company termed the order unfortunate and was looking at working
with driving partners to continue functioning. They also claimed to be in touch with authorities to sort
things out.
Services
Ola offers different levels of service, ranging from economic to luxury travel. The cabs are reserved
through a mobile app and also through their website and the service accepts both cash and cashless
payments with Ola money. It claims to clock an average of more than 150,000 bookings per day and
commands 60% of the market share in India as of 2014. As of 2019, the company has expanded to a
network of more than 1.5 million drivers across 250 cities.
Ola Auto
In November 2014, Ola diversified to incorporate auto rickshaws on a trial basis in Bengaluru. After the
trial phase, Ola Auto expanded to other cities like Delhi, Pune, Chennai and Hyderabad starting in
December 2014.
Ola spun off its electric vehicles business into a separate unit called Ola Electric Mobility with US$ 56
million of funding capital in February 2019. The funding was provided by Tiger Global and Matrix
India. Apart from electric vehicles, Ola Electric also works on charging solutions, EV batteries and
developing viable infrastructure to allow commercial EVs to operate at scale. The company announced on
6 May 2019 that Ratan Tata had invested an undisclosed amount in Ola Electric as part of its Series A
round of funding.
Ola Electric raised $250 million from SoftBank during Series B round funding in July 2019, earning a
valuation of over $1 billion.
Anand Shah, co-founder, Ola Electric and senior VP, Ola Cabs said that Ola Electric will need more capital
to achieve its target of putting 1 million EVs on the roads by 2021.
Ola Electric acquired Amsterdam-based EV startup Etergo on 27 May 2020 to launch an own line of
electric scooters in 2020.
Ola Electric CEO Bhavish Aggarwal announced in March 2021 that the company was building a 500 acre,
fully-automated factory in Hosur City of Krishnagiri, Tamil Nadu to manufacture electric two wheelers.
The company claims it will be the largest two wheeler factory in the world with an annual production
capacity of 10 million units.
UBER CABS
Uber Technologies, Inc., commonly known as Uber, is an American technology company. Its services
include ride-hailing, food delivery (Uber Eats), package delivery, couriers, freight transportation, and,
through a partnership with Lime, electric bicycle and motorized scooter rental. The company is based
in San Francisco and has operations in over 900 metropolitan areas worldwide. It is one of the largest firms
in the gig economy.
Uber is estimated to have over 93 million monthly active users worldwide. In the United States, Uber has a
71% market share for ride-sharing and a 22% market share for food delivery. Uber has been so prominent
in the sharing economy that changes in various industries as a result of Uber have been referred to
as uberisation, and many startups have described their offerings as "Uber for X".
Like similar companies, Uber has been criticized for the treatment of drivers as independent contractors,
disruption of taxicab businesses, and an increase in traffic congestion. The company has been criticized for
various unethical practices and for ignoring local regulations, particularly under the leadership of former
CEO Travis Kalanick.
History
In 2009, Uber was founded as Ubercab by Garrett Camp, a computer programmer and the co-founder
of StumbleUpon, and Travis Kalanick, who sold his Red Swoosh startup for $19 million in 2007.
After Camp and his friends spent $800 hiring a private driver, he wanted to find a way to reduce the cost of
direct transportation. He realized that sharing the cost with people could make it affordable, and his idea
morphed into Uber. Kalanick joined Camp and gives him "full credit for the idea" of Uber. The prototype
was built by Camp and his friends, Oscar Salazar and Conrad Whelan, with Kalanick as the "mega advisor"
to the company.
In February 2010, Ryan Graves became the first Uber employee. Graves started out as general manager
and was named CEO shortly after the launch. In December 2010, Kalanick succeeded Graves as CEO.
Graves became chief operating officer (COO). By 2019, Graves owned 31.9 million shares.
Following a beta launch in May 2010, Uber's services and mobile app officially launched in San Francisco
in 2011. Originally, the application only allowed users to hail a black luxury car and the price was 1.5 times
that of a taxi. In 2011, the company changed its name from UberCab to Uber after complaints from San
Francisco taxicab operators.
Services
Uber determines the fees and terms on which drivers transport riders. The company takes a 25% share of
each fare provided by Uber’s “partners”. Uber uses a dynamic pricing model. Fares fluctuate depending on
the local supply and demand at time of service. Customers are quoted the fare in advance.
Service is generally accessed via mobile app. Users set up a personal profile with a name, phone number,
other information, and payment preference, which could be a credit card, e-commerce payment system or,
in some cases, cash. After the service is complete, the customer may be given the option to provide
a gratuity to the driver, which is also billed to the customer's payment method.
The status of drivers as independent contractors is an unresolved issue. Drivers provide a vehicle, which
could be owned, rented, or leased. Drivers must meet requirements for age, health, car age and type, have
a driver's license and a smartphone or tablet, and may be required to pass a background check. In many
cities, vehicles must pass annual safety inspections and/or must have an emblem posted in the passenger
window. Some cities also require drivers to have a business license. There may be accommodations for
hearing-impaired drivers. Drivers may be notified before accepting a trip if it will be longer than 45
minutes. After each transaction, drivers and customers may rate each other and users with low ratings may
be deactivated.
CHAPTER 2
The topic of research here is “A Comparative Study of Consumer Preferences of Online Cab Booking
Services (OLA & UBER CABS)”. So the project is to study the Preference of the consumers.
Here the term ‘consumer’ means the end user of the product who not only consumes the product but also
gives the feedback to the company.
The traditional view point has been to define consumer strictly in terms of economic goods and services.
This position holds the consumers are potential purchasers of product and services offered for sale.
Consumer Behavior
It may be defined as” the decision process and the physical activities individuals engage in when
evaluating, acquiring, using or disposing of goods and services.
The Consumer Behavior research goes far beyond the facts of consumer preferences and encompasses all
of the behaviors that consumers display in searching for purchasing, using, evaluating and disposing of
products and services that they expect would satisfy their need.
One "official" definition of consumer behavior is "The study of individuals, groups, or organizations and
the processes they use to select, secure, use, and dispose of products, services, experiences ideas to satisfy
needs and the impacts that these processes have on the consumer and society." Although it is not necessary
to memorize this definition, it brings up some useful points:
• Behavior occurs either for the individual, or in the context of a group (e.g., friend’s influence what kinds
of clothes a person wears) or an organization (people on the job make decisions as to which products the
firm should use).
• Consumer behavior involves the use and disposal of products as well as the study of how they are
purchased. Product use is often of great interest to the marketer, because this may influence how a product
is best positioned or how we can encourage increased consumption. Since many environmental problems
result from product disposal (e.g., motor oil being sent into sewage systems to save the recycling fee, or
garbage piling up at landfills) this is also an area of interest.
• Consumer behavior involves services and ideas as well as tangible products.
• The impact of consumer behavior on society is also of relevance. For example, aggressive marketing of
high fat foods, or aggressive marketing of easy credit, may have serious repercussions for the national
health and economy.
The underlying foundation of demand, therefore, is a model of how consumers behave. The individual
consumer has a set of preferences and values whose determination are outside the realm of economics.
They are no doubt dependent upon culture, education, and individual tastes, among a plethora of other
factors. The measure of these values in this model for a particular good is in terms of the real opportunity
cost to the consumer who purchases and consumes the good. If an individual purchases a particular good,
then the opportunity cost of that purchase is the forgone goods the consumer could have bought instead.
We develop a model in which we map or graphically derive consumer preferences. These are measured in
terms of the level of satisfaction the consumer obtains from consuming various combinations or bundles of
goods. The consumer’s objective is to choose the bundle of goods which provides the greatest level of
satisfaction as they the consumer define it. But consumers are very much constrained in their choices.
These constraints are defined by the consumer’s income, and the prices the consumer pays for the goods.
We will formally present the model of consumer choice. As we go along, we will establish a vocabulary in
order to explain the model. Development of the model will be in three stages. After a formal statement of
the consumer’s objectives, we will map the consumer’s preferences. Secondly, we present the consumer’s
budget constraint; and lastly, combine the two in order to examine the consumer’s choices of goods.
THE THEORY OF THE CONSUMER
Consumer make decisions by allocating their scarce income across all possible goods in order to obtain the
greatest satisfaction. Formally, we say that consumers maximize their utility subject to budget constraint.
Utility is defined as the satisfaction that a consumer derives from the consumption of a good. As noted
above, utility’s determinants are decided by a host of noneconomic factors. Consumer value is measured in
terms of the relative utilities between goods. These reflect the consumer’s preferences.
Consumer preferences are defined as the subjective (individual) tastes, as measured by utility, of various
bundles of goods. They permit the consumer to rank these bundles of goods according to the levels of
utility they give the consumer. Note that preferences are independent of income and prices. Ability to
purchase goods does not determine a consumer’s likes or dislikes. One can have a preference for Porsches
over Fords but only have the financial means to drive a Ford.
Consumer preference determines what products people will buy within their budget, understanding
consumer preference will give you an indication of consumer demand. This information will help to
ensure that you have enough product to meet demand and will help you determine the price for your
product.
If, for example, your company makes dresses, knowing what women prefer in a dress will help you
determine which colors and fabrics will sell better than others, as well as whether shorter hemlines will
sell better than longer hemlines. If your products are comparable to more expensive brands, you may be
able to sell them at a higher profit. On the other hand, if your competitors offer similar dresses for less
money that are also preferable to yours, you may need to reduce production, change the design or reduce
your profit to ensure you aren't left with too much inventory at the end of the season.
As the preference for one product over another increase, one product may outsell the other even if the
price is much higher. However, when the preference is negligible, then price and availabilit y become the
determining factors over which one will sell better.
How to determine Consumer Preference?
To determine what consumers prefer, you have to give them similar products to compare. When offering
them two or more products to evaluate, each product should be complete. Asking them to compare
apples to oranges is fair, but asking them if they would rather have six apples or two oranges is not. One
preference that does not change when evaluating commodities is that consumers always prefer more to
less. As well, if consumers prefer product A over product B, and they prefer product C to product A, then
it is always safe to assume they prefer product C over product B, too.
A common way to determine consumer preferences is to create a consumer panel. A company may do
this itself or by hiring a market research organization. The panel is typically selected based on the
demographics you hope your product will appeal to. There are four different ways to determine
preferences with a consumer panel.
Preference Tests
Preference testing is useful when you want to compare one product to another. The consumers are given
two or more products and asked which they prefer. Once their preferences, or lack of preference, are
recorded, you can then analyze the results to determine which product is preferred. You cannot, however,
determine how much each product was liked using this method.
Acceptance Tests
Acceptance testing can determine how much a product is liked. Instead of stating which product is
preferred compared to others, the consumers are asked to give a score to each product based on their like
or dislike for it. This test is also called hedonic ranking. Usually, the scoring system is based on a nine -
point scale, ranging from extreme like to extreme dislike, with neither dislike or like in the middle.
Depending on the products being evaluated, you can ask for different scores for different properties, such
as physical appearance, color or other attributes.
Ranking Tests
A third way of determining consumer preferences is to use a ranking test. Ranking tests are usually best
for comparing consumer preference between three or more products, which the panel ranks according to
their preference. A ranking test does not reveal how much more consumers like one product over
another.
Difference Tests
As its name suggests, difference testing measures how well consumers can tell the difference between
two products. For example, if your company has developed a new soda, you could ask consumers to
compare it to a previous version you sold, as well as to similar competitors’ sodas, for aspects like
sweetness. While this test itself doesn’t reveal preferences, it can provide insight into products when
used with any of the other tests.
A taxicab or taxi or cab is a car and driver that can be hired to carry passengers to a requested destination.
Pre-Taxi
Before the invention of the car, the practice of vehicles for public hire was in place. In 1640, in Paris,
Nicolas Sauvage offered horse-drawn carriages and drivers for hire. In 1635, the Hackney Carriage Act
was the first legislation passed that controlled horse-drawn carriages for hire in England.
Taximeter
The name taxicab was taken from the word taximeter. The taximeter is the instrument that measures the
distance or time a vehicle travels and allows an accurate fare to be determined. The taximeter was invented
by the German inventor, Wilhelm Bruhn in 1891.
Daimler Victoria
Gottlieb Daimler built the world's first dedicated taxi in 1897 called the Daimler Victoria. The taxi came
equipped with the newly invented taxi meter. On 16 June 1897, the Daimler Victoria taxi was delivered to
Friedrich Greiner, a Stuttgart entrepreneur who started the world's first motorized Taxi Company.
On September 13, 1899, the first American died in a car accident. That car was a Taxi, there were about
one hundred taxis operating on New York's streets that year. Sixty-eight-year-old Henry Bliss was helping
a friend from a streetcar when a taxi driver lost control and fatally hit Bliss.
The revolution of the taxi industry
Cab aggregators, earlier known as Call Taxis or Radio Taxis, started out in early 2000s. They ran with
several operators across cities and you can see some of them still up and running efficiently.
Post this period, the taxi industry saw a steady rise of businesses that offered their customers cabs on
demand. Here’s a quick rundown of some of the names that we still see around us:
These services started on a pretty simple model - you would call their call center to book a cab at standard
fixed prices and you would receive proper bills at the end of a ride. The taxis were tracked through radio
which provided a sense of security to the customers.
For safety and efficiency purposes, they provide the details of the vehicle via SMS to the customer - from
the driver’s name, to the vehicle type and number.
Meru Cabs entered the industry in 2007 and changed the industry by introducing automatic printed bills,
credit card payments, cab booking through website, etc. The company expanded into 23 cities quickly,
operating through their own vehicles which were then licensed to drivers.
The growth in smartphones and apps have revolutionized the taxi industry further, making it easier for
customers to book cabs to any destination - within the city or outside of it.
The key players that brought in this industry changing trend are:
1. Ola Cabs - Founded in 2010 - Presently active in 100 cities, the company lets customer book cabs
only through their app. With a funding of $700 million, the company is growing at an exponential
rate.
2. Taxi for Sure - While they started as a separate company that allowed customers to book cabs on-
the-go via an app, it has been taken over by Ola.
3. Uber - Founded in San Francisco in 2009, the company is active in almost 100 cities in India. With
a funding of $6 billion,
4. The three operators have been aggressively chasing the biggest resource in the taxi industry - the
drivers; and are expanding at a rapid pace since the last one year.
OLA CABS
OlaCabs has emerged as pre-eminent mobile app for personal transportation in India. Ola as it is popularly
known started as an online cab aggregator in Mumbai. It was founded in December 2010 and launched in
January 2011 by the alumnus of Indian Institute of Technology Bombay, Mr Bhavish Aggarwal (currently
CEO) and Mr Ankit Bhati (CTO). Ola is owned by ANI Technologies Pvt Ltd (cf. Ola Cabs, website,
Wikipedia). In November 2014, Ola expanded to incorporate autos on-trial basis in Bengaluru (cf. Now
Book Auto Rickshaws in Bangalore via Ola Cabs, NDTV Gadgets). Post the trial phase, Ola Auto
expanded to other cities like Delhi, Pune and Chennai.
As of October 2019, Ola was valued at about US$6.5 billion[3] A variety of venture
capitalists including Softbank have large stakes in the company.[4]
In January 2018, Ola extended into its first overseas market, Australia, and in New Zealand in September
2018.[5] In March 2019, Ola began its UK operations introducing auto rickshaws in UK. More than 10,000
drivers have applied both in online and offline mode ahead of its launch in London. In February 2020, Ola
launched its taxi-hailing services with over 25,000 drivers registered
Acquisition
In March 2015, Ola Cabs acquired Bengaluru-based taxi service TaxiForSure for approximately ₹ 1237
crore (US$ 200 million). June 2015 onwards, Ola users gained access to TFS cabs via the Ola mobile
application. Later in the year in November, Ola further acquired Geotagg, a trip-planning applications
company, for an undisclosed sum.
In a move to expand beyond cab aggregation, Ola acquired struggling foodtech company Foodpanda with
an eye on leveraging the growing food delivery segment business in December 2017. In April 2018, Ola
made its second acquisition with Ridlr (formerly Traffline), a public transport ticketing app. Later in
August 2018, Ola financed Series A funding of the scooter rent startup Vogo, and again in December,
invested another $100 million.
Funding
Till date, Ola had received six rounds of funding. In 2012, Ola raised an undisclosed amount in Series A
funding from US-based Tiger Global Management. In 2013, Ola received Series B funding from Matrix
Partners and Tiger Global. In July 2014, Ola raised Rs 250 crore from Steadview Capital and Sequoia
Capital. In October 2014, Japan‘s SoftBank Internet and Media led a Series D funding of $210 million
(about Rs 1,281 crore), one of the largest fund raising in the Indian consumer technology and mobile space.
Existing investors Tiger Global, Matrix Partners India and Steadview Capital also participated in the round.
Ola also has angel funding from Rehan Yar Khan, Anupam Mittal of Shaadi.com and Snapdeal co-founder
Kunal Bahl. (cf. ola acquires TaxiForSure for $ 200 million in a bid to compete with Uber.
In November 2015, Ola closed $500 million in its Series F funding round. Baillie Gifford, Falcon Edge
Capital, Tiger Global, SoftBank Group, DST Global and Didi Kuaidi participated in this round. Ola will
use these funds to further accelerate its growth in the Indian market with a focus on building mobility for a
billion people (cf. Ola raises $ 500 million in series F funding. Website,
http://forbesindia.com/article/special). Interestingly, Ola also roped in Ratan Tata, chairman emeritus of
Tata Sons, the private holding arm of the business conglomerate, as a small shareholder.
UBER CABS
Uber Technologies Inc. is an American international transportation network company headquartered in San
Francisco, California. Founded in the year 2009 by Travis Kalanick and Garrett Camp, the company
develops, markets and operates the Uber mobile app, which allows consumers with smart phones to submit
a trip request which is then routed to Uber drivers who use their own cars. Beginning in 2012, Uber
expanded internationally. By end 2015, the service was available in 68 countries and 372 cities worldwide
(cf. website, http://www.Uber.com). Since Uber's launch, several other companies have copied its business
model, a trend that has come to be referred to as "Uberification".
Service Overview
Uber determines the fees and terms on which drivers transport riders. The company takes a 25% share of
each fare provided by Uber’s “partners”. Uber uses a dynamic pricing model. Fares fluctuate depending on
the local supply and demand at time of service. Customers are quoted the fare in advance.
Service is generally accessed via mobile app. Users set up a personal profile with a name, phone number,
other information, and payment preference, which could be a credit card, e-commerce payment system or,
in some cases, cash. After the service is complete, the customer may be given the option to provide
a gratuity to the driver, which is also billed to the customer's payment method.
The status of drivers as independent contractors is an unresolved issue. Drivers provide a vehicle, which
could be owned, rented, or leased. Drivers must meet requirements for age, health, car age and type, have
a driver's license and a smartphone or tablet, and may be required to pass a background check. In many
cities, vehicles must pass annual safety inspections and/or must have an emblem posted in the passenger
window. Some cities also require drivers to have a business license. There may be accommodations for
hearing-impaired drivers.
Funding
Uber is one the world‘s strongly funded startups. In the past, Uber has raised funding from marquee
investors like Fidelity Investments, Wellington Management, BlackRock Inc, Summit Partners, Google
Ventures, Menlo Ventures, New Enterprise Associates (NEA) and Qatar Investment Authority. Uber was
valued at $40 billion during its last round in December 2014. At least two Indian family offices invested in
Uber in its latest funding round where it raised $1.2 billion led by China's Hillhouse Capital Group and
other investors. Both these family offices have significant exposure to India's burgeoning technology
services and the internet space. One is the Times Internet Ltd, the digital arm of the Times of India Group,
had inked a commercial marketing partnership with Uber which also included a small undisclosed
investment to facilitate Uber's expansion in India. The other is the Tata Capital's flagship private equity
fund Tata Opportunities Fund (TOF).
The online taxi services market in India is mainly driven by two major players - ANI Technologies Private
Limited (Ola Cabs) and Uber India Systems Private Limited (Uber India). In FY 2019, Ola Cabs accounted
for almost 72.44% of the total revenue generated by the online taxi services market in India, whereas, Uber
India held a share of ~21.01%.
Market Share
RESEARCH METHODOLOGY
According to the American sociologist Earl Robert Babbie, “Research is a systematic inquiry
to describe, explain, predict, and control the observed phenomenon. Research involves inductive
and deductive methods.”
Inductive research methods are used to analyze an observed event. Deductive methods are used
to verify the observed event. Inductive approaches are associated with qualitative research and
deductive methods are more commonly associated with quantitative research.
Research is defined as the creation of new knowledge and/or the use of existing knowledge
in a new and creative way so as to generate new concepts, methodologies and
understandings. This could include synthesis and analysis of previous research to the
extent that it leads to new and creative outcomes.
This definition of research is consistent with a broad notion of research and experimental
development (R&D) as comprising of creative work undertaken on a systematic basis in order to
increase the stock of knowledge, including knowledge of humanity, culture and society, and the
use of this stock of knowledge to devise new applications.
This definition of research encompasses pure and strategic basic research, applied research and
experimental development. Applied research is original investigation undertaken to acquire new
knowledge but directed towards a specific, practical aim or objective (including a client-driven
purpose).
OBJECTIVES OF THE STUDY
1) The objective of the study is to get an insight of the consumer preference on Ola
Cabs and Uber Cabs.
2) To comprehensively analyze the Online Cab Booking Industry.
3) To identify the difference between satisfactions levels for both cab services.
Scope of Study
The study aims to analyze the customer preferences while booking and riding in an online cab service. The
study is conducted in Delhi and Noida region. This study is focused on identify the difference between Ola
and Uber customers and for this data has been collected with the help of structured questionnaire. In recent
years, the demand for online cab services has increased exponentially due to increase in Internet
penetration in India. The study aims to find out all the driving factors for the rise of the industry and the
key market players i.e. Ola Cabs and Uber Cabs.
The research design is a framework for planning your research and answering your research
questions. A Research Design is a methodical, well-organized procedure utilized by a
researcher, or a scientist to carry out a scientific study. It is a comprehensive co-existence of
already identified elements and any other information or data leading to a reasonable end result.
The research design is required to follow a pre-planned, well-thought-out methodology, in
agreement with the pre-selected research type, in order to come up with an error-free, authentic
conclusion.
TYPES OF RESEARCH DESIGN
A Research Design is necessary since it enables the smooth sailing of the varying research
components, thus making your research more reliable, efficient, and flexible.
As the name implies, the primary objective of exploratory research is to explore a problem to
provide insights into and comprehension for more precise investigation. It focuses on the
discovery of ideas and thoughts. The exploratory research design is suitable for studies which are
flexible enough to provide an opportunity for considering all the aspects of the problem.
By the term descriptive research, we mean a type of conclusive research study which is
concerned with describing the characteristics of a particular individual or group. It includes
research related to specific predictions, features or functions of person or group, the narration of
facts, etc.
The sample size is a term used in market research for defining the number of subjects included in
a sample size. By sample size, we understand a group of subjects that are selected from the
general population and is considered a representative of the real population for that specific
study.
For example, if we want to predict how the population in a specific age group will react to a new
product, we can first test it on a sample size that is representative of the targeted population. The
sample size, in this case, will be given by the number of people in that age group that will be
surveyed.
3 Probability Sampling Techniques
1. Random Sampling
2. Systematic Sampling
3. Stratified Sampling
Primary data sources include information collected and processed directly by the researcher,
such as observations, surveys, interviews, and focus groups.
Secondary data sources include information retrieved through preexisting sources: research
articles, Internet or library searches, etc.
In this research study, I have collected data from Questionnaire (Primary Data Source) and from
various research papers and articles (Secondary Data Source). The research instruments used in
this study was a questionnaire, designed specifically for the purpose of research study on
Consumer Preference.
CHAPTER 4
Age
Age in Percentage
Below 18 15
18-30 55
30-45 25
45+ 5
Interpretation
From the Pie-chart and table , it can be observed that the age of the respondents are less
than 18, 18-30, 30-45, more than 45 have been taken in this survey. These numbers show
that most of the respondents are young.
Ques. What is your gender?
Gender
Male Female
Gender
Male 58
Female 42
Interpretation
From the above Pie-chart, it can be observed that 58% males and 42% females have been
taken in this survey.
Ques. What is your Occupation?
Occupation
Occupation
Student 35
Working 55
Home Maker 10
Interpretation
From the Pie-chart and table, it can be observed that 35% respondent are Student, other
55% respondent are working individual and the rest of the 10% are home maker.
Ques. Do you book cabs online?
Booking
Yes No
Cab Booking
Yes 94
No 6
Interpretation
From the above Pie-Chart and table, it can be observed that 94% booked a cab in their
life or book cabs in their daily life. Whereas only 6% doesn’t book cabs.
Ques. How frequently do you book a cab in a month?
Frequency
Frequency
0-1 14
1-5 57
5-10 19
10+ 10
Interpretation
From the above Pie-Chart and table, it can be observed that most respondent are from 1-5
group meaning around 57% respondent book a cab 1 to 5 times a month and around 19
respondent books a cab 5 to 10 times a month whereas nearly around 14 respondent book
once in a month and around 10 respondent books more than 10 times a month.
Ques. Which cab aggregator do you prefer?
Preference
Product
Review
Ola Cabs 53
Uber Cabs 47
Interpretation
From the above Pie-Chart and table, it can be observed that most customers prefer to
travel with Ola Cabs with 53 respondents selected Ola Cabs as their first preference. But
Uber Cabs is not far behind around 47 respondent selected Uber Cabs as their first
preference.
Ques. Which factor is most important to you when choosing a form of
transportation?
Important Factor
Important
Factor
Price (affordability) 7
Ease of use 0
(convenience)
Safety & Security 19
All of the above 74
Interpretation
From the above Pie-chart, it can be observed that 7 respondent selected price as their main
factor to choose any transportation, but nobody selected ease of use as their prima factor,
there were 19 respondent who preferred safety & security while booking a ride, and
almost 74 respondent selected all the factor mentioned as important for them to select or
book any cab.
Ques. Which safety feature according to you would work?
Safety Feature
GPS Tracking CCTV Camera Panic app Option All the above
Safety
Feature
GPS Tracking 2
CCTV Camera 2
Panic app Option 1
All the above 95
Interpretation
From the above Pie-Chart and table, it can be observed that 2 respondent selected GPS
tracking as their first priority when it comes to safety feature in a cab. Similarly 2 respondent
selected CCTV Camera as their first safety feature, only 1 respondent selected panic app
option but with the majority of whooping 95 respondent selected all the options as their top
priority safety features for any cab services to offer to their customer.
Ques. According to you which cab aggregator is more affordable.
Affordable
Affordable
Ola Cabs 56
Uber Cabs 44
Interpretation
From the above Pie-Chart and table, it can be observed that majority of respondent selected
Ola Cabs as most affordable with 56 respondent. And around 44 respondent selected Uber cab
as cheaper than Ola Cabs.
Ques. Which Cab services have more presence in your area in terms of
Cabs availability?
Presence
Presence
Ola Cabs 48
Uber Cabs 52
Interpretation
From the above Pie-chart, it can be observed that 48 respondent selected Ola Cabs for
having more presence in their locality and around 52 respondent selected Uber Cabs
having more cab presence in their locality.
Ques. According to you, which Cab service is safer?
Safety
Safety
Ola Cabs 57
Uber Cabs 43
Interpretation
From the above Pie-Chart and table, it can be observed that majority of respondent selected Ola
Cabs service as having more security features whereas, around 43 respondent selected Uber
Cabs as having better security feature or they feel more secured in an Uber Cab.
Ques. Which cab service has best customer support?
Customer Support
Customer Support
Ola Cabs 65
Uber Cabs 35
Interpretation
From the above Pie-chart and table, it can be observed that 65% respondent feels Ola’s
Customer support is better. Whereas, 35 respondent feel Uber’s customer support is better as
compared to Ola Cabs.
Ques. Which Cab Service is more customer friendly?
Customer Friendly
Customer Friendly
Ola Cabs 46
Uber Cabs 54
Interpretation
From the above Pie-Chart and table, it can be observed that majority of respondent selected
Uber Cabs as more Customer friendly with 54% and around 46 respondent feel Ola Cabs are
the best when it comes to customer friendly aspect.
Ques. Which Cab service is more customized to customer needs?
Customizable
Customizable
Ola Cabs 67
Uber Cabs 33
Interpretation
From the above Pie-Chart and table, it can be observed that majority of respondent selected
Ola Cabs as more Customizable with 67% and around 33 respondent feel Uber Cabs are the
best when it comes to customize the cab services according to the customer needs.
CHAPTER 5
This survey was conducted in Delhi and Noida through Online medium. While analyzing the survey we
found a lot of people from Delhi and Noida prefer to go out in cabs as it becomes one of the safest and easy
way to reach the destination. The survey was for all the age groups and all participated in the survey but a
major chunk of respondent were from 18 to 30 years old. Ola and Uber cab services are booming in this
region with the availability of a lot of cab drivers available anytime even at night make it even more
accessible and customer centric.
All the people go for cab irrespective of in what occupation they are in, whether he is a student, home
maker or a working professional they opt for Cab services like Ola and Uber for long and short distances.
A lot of people selected Ola cabs cheaper when it comes for short distances and Uber cabs cheaper for long
distances. Being a home grown company in India, Ola cabs currently is the first choice of Delhi and Noida
citizens but as Uber is ramping up their customer service, they are not far behind Ola and soon we can see
Uber to catch up with Ola and even beat them.
Today when Indian Youth are so brand conscious, they expect many safety features from a cab service
company starting from GPS tracking device to track the location of cab as girls safety are now becoming
top priority for customer as well as cab service companies, CCTV cameras in the car to track unusual
activity from driver or to monitor driver's behavior and also a Panic app option to alert the operator to
police in case of any mishappening. In accordance to the safety many people preferred Ola cabs safer than
Uber cabs.
Customer support is one thing which can make or break your customer base and companies do invest
heavy to improve their customer support, while asking this question from different respondent many
preferred Ola cab having good customer support as compared to Uber as Ola cabs is very quick to resolve
any query and to initiate refund in case of any misconduct. Uber cabs is the first choice of people for being
more customer friendly, the drivers of Uber is customer friendly and more calm than the driver of Ola cabs.
At last people said Ola cabs is more customizable when it comes to bend according to their customer
needs, and this becomes one of the major reason why Ola cabs is the first choice of customer in Delhi and
Noida region.
CHAPTER 6
Uber cabs should focus more on their customer segment as the potential customer
selected Ola cabs as their first priority to book a cab service online.
As many of the respondent in the survey preferred safety measures as their first
priority, both the cab aggregator including Ola and Uber cabs should include many
safety features for their customer especially for women customer to make them feel
safe while riding with them.
While booking a cab, pricing plays a very important role and the cab companies
should ensure to charge feasible amount to grab the market share as respondents were
price conscious.
Cab companies should try to increase their cabs availability in the region by attracting
more and more cab drivers to work for them. Availability of cabs is an important factor
and both Uber and Ola cabs are neck to neck in this segment, but in order to grab more
revenue or market share they should onboard more drivers and cabs..
Having very diverse set of customer, both the cab companies should work upon
improving the customer experience. Specially Uber cab has to focus more on it as Ola
cabs is currently the first choice of customer when it comes to giving good customer
experience, Uber cab can customize their services according to the customer needs in
order to provide maximum customer experience..
Uber Cab is growing in India but they are currently lagging behind in many aspect when
we compare it to Ola cabs, and customer support is one of the major factor which can
make or break a company. Uber cab has to give good customer support in case of any
dispute while riding, having a good customer support system Uber cab has the potential
to reach on the top of Indian Online Cab Booking Segment.
Limitations
The growing demand of cab services during Covid-19 pandemic has increased the bar
for Cab aggregators to maintain the demand and supply gap in the market. The cab
availability is less and there are many people to book a cab has created a negative image
for Ola and Uber cabs in respect to unavailability of Cabs. To restore this image they
should onboard more Driving partners.
The competition is very huge in this segment, a lot of startup companies are launching in
this field as there is no harsh entry barriers, and the competition is increasing day by day
which is alarming situation for Ola and Uber cabs.
As the customers are very price conscious they tend to shift to other cab aggregator
when they offer low price for the same distance.
Drivers are not satisfied because of payment issues in Delhi and Noida region.
Drivers are not trained and don't possess soft skills, which sometime creates bad
customer experience.
Uber is still not present in many cities in India, which gives Ola cabs an edge over Uber
cabs.
There is no proper mechanism to keep a check on women’s safety in the cab i.e. no CCTV camera
in the cab and panic button in very few cabs. Both Ola and Uber lacks seriously in terms of safety
issues.
REFERENCES & BIBLIOGRAPHY
Rajesh, D. R., & Chincholkar, S. (2018). A Comparative Study of Ola And Uber
Customers In Mumbai. Jurnal Internasional.
Shukla, R., Chandra, A., & Jain, H. (2017). Ola Vs Uber: The Battle of
Dominance. IOSR Journal of Business and Management, e-ISSN, 73-78.
Sharma, K., & Das, S. (2017). Service quality and customer satisfaction-with
special focus on the online cab industry in India. International Journal of
Business and Management, 12(7), 192-200.
Bellis, Mary. (2020, August 27). Hailing: History of the Taxi. Retrieved from
https://www.thoughtco.com/hailing-history-of-the-taxi-1992541.
Indulkar, Y., & Patil, A. (2020, September). Sentiment Analysis of Uber & Ola using
Deep Learning. In 2020 International Conference on Smart Electronics and
Communication (ICOSEC) (pp. 21-27). IEEE.
https://www.researchgate.net/publication/329504341_A_Study_on_Consumer_Perception_of_Ol
a_and_Uber_Taxi_Services
APPENDIX
Questionnaire
1) Your Name
A) Male B) Female
11) Which Cab services have more presence in your area in terms of Cabs availability?
A) Ola Cabs B) Uber Cabs