What Will Turn the Tides for Uber and Ola Rides?

What will it take to turn the tide for online rides?

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Public Opinion & COVID Sway 2020 Trends

Ride Hailing via online apps is now an established market in India with the key operators functioning in India for nearly a decade. According to Statista the Online Ride Hailing and Taxi segment dropped nearly 75% in revenues in 2020 vs 2019. Even the 2021 recovery (at 6.7K Million USD1) was only marginally higher compared to the 2019 level. The revenue drop in 2020 is mostly attributable to COVID-19 related lockdowns and curbs.  

However the immediate future would be full of possibilities as consumer fundamentals are still strong for the online ride hailing market.  For instance, even though the disposable income has depleted due to job losses, still the need for mobility has remained high specially in wake of economic recovery. Along with this there is changing perception towards shared mobility as against owning a vehicle, this a key factor that would drive growth for online ride hailing esp. in urban India.

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A Look At The Data

Given the strategic growth requirements it is imperative that the Online Ride Hailing Market now finds either new users or new price points. Finding new users would be challenging as our data indicate that the online ride hailing services are already penetrated in 200+ cities in India.

‍We at Vumonic Datalabs are front runners in tracking the ride hailing market in India with a real-time data engine that allows us to slice and dice into the analytics and get the real story – not just for ride hail, but for ecommerce, OTT, and food delivery, too.

So here’s the deal: the overall rides by city tiers indicate that the rides volume has recovered to 2019 levels and there is no discerning difference across the city tiers – mitigating the hypothesis that new users would start using online ride hailing services.

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However the recovery has been slow; esp. after the first lockdown. As after the first lockdown many corporates shifted their focus to higher productivity and significant work from home allowance. Additionally there were sporadic curbs all across the country.

After the second wave, the recovery was faster as hard lessons were learnt on the deep economic impact of stringent lockdowns. Economic recovery was given precedence and extent of covid related curbs was localised. The same can be witnessed in Vumonic’s rides trend from May 2021 onwards.

Interestingly, our online rides data match well with the Consumer Confidence Index - a bimonthly survey conducted by RBI:

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Subsequently, when we interrogate our data to unearth what could be the drivers for growth; we see that the contribution of more economical modes of transport are growing quite significantly. Both in terms of volume and value contribution.

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Thus the future of shared mobility lies with growing acceptance of economical modes of transport - autos and bikes. There are players who are focusing completely on this segment like Rapido & Baxi and even the well entrenched players like Ola & Uber have started offering these services.  

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Vumonic Datalabs is a global consumer intelligence platform. We provide high quality, deterministically linked, large structured data that can be used to derive deep consumer,  business and market insights. Our proprietary data pipelines deliver unbiased actual transaction data collected in a privacy secure manner via large global panels.

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Sources:

1: Statista - India Ride Hailing & Taxi Estimates - Ride-hailing & Taxi - India | Statista Market Forecast

2. RBI - Consumer Confidence Survey - Reserve Bank of India - Consumer Confidence Survey - Bi-monthly (rbi.org.in)