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State V/s Cab Aggregators. Who Benefits?

State V/s Cab Aggregators. Who Benefits?
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You're reading Entrepreneur India, an international franchise of Entrepreneur Media.

Both the industry leaders of cab-servicing segment Ola and Uber have refused to render their services unless the demands are fulfilled, which is raising trouble to the commuters on its fourth consecutive day in states like New Delhi, Karanataka and Hyderabad.

With demands like an increase in incentives, provision of insurance policies and a curtailment in working hours, two drivers of a Delhi-based Drivers’ Association have gone on an indefinite strike. The sudden tussle between the association of drivers and taxi aggregators on insurance policies has taken place after the death of Uber cab driver in an accident in New Delhi.

This is not the first time a strike by drivers of global taxi aggregators Uber & Indian firm ANI Technologies-backed Ola Cabs has taken place. Ola and Uber have faced many petitions and lawsuits filed against them for the fare hikes in the past few years. Also, in 2015, both the companies were under the scanner of the Competition Commission of India (CCI) against the allegations of predatory pricing and abuse of dominant position.  

Indian taxi & auto drivers have voiced concerns of a hit to customer demand owing to private players’ dominance & clout. While the state government has sent out a legal notice on the unlicensed car-sharing service to taxi aggregators, Ola and Uber are in no moods to take a step back and call off strike.

Let’s see who benefits when such a battleground gets prepared.

1. Competitors and smaller players 

In the ongoing battle of taxi aggregators and state government, small players and new entrants in the cab-servicing segment are going to take a lead on the current phase. Eyeing an opportunity in the current crisis, small logistics players like Chandigarh-based Jugnoo is already on-roads with its newly launched cab service in Gurugram, the national capital region (NCR) in Delhi. Other taxi companies like ApnaCabs, WomenCabs, AutonCab are also proving to be demanding in tier 2 and tier 3 cities due to industry leading companies strike and fare hike. Also, the competitors like Meru Cabs, Taxi For Sure, Wings Radio Cabs etc. 

2. Govt-run local modes of transport

The big mover advantage is going to be the government-run transportation like buses, metros and autos, which has already risen up its sales with respect to the fourth day of taxi aggregators’ strike. Delhi Metro Rail Corporation (DMRC) has said to the Indian media that there is a notable increase in passengers travelling metro, but it will be managed by the corporation. Also, the government owned KaaliPeeli taxis are on the demand with high pace. Apparently, less number of cabs on roads will steer the reduction in traffic and pollution in cities.

3. Spurs newer players

Fundamentally the newer players will jump into the bandwagon seeing an opportunity with huge demand in the cab-servicing segment. Startups which have newly entered in the logistics segment could also gain benefits due to the indefinite strike called by taxi aggregators in India.

4. Car rental companies

With respect to the huge demand of cab services in metro cities, car-rental companies could also see a rise in sales. With nominal intra and inter-city fares, private car-rental companies like Carzonerent, Euro Cars, Myles Car etc. can attain a profitable growth in market.

 
Edition: April 2017

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