Uber rides into bus lane in India, looking to launch local bus services

Uber is looking to launch a shuttle bus service in India in a year.

Source: Unsplash.

U.S. ride-hailing giant Uber has had a turbulent ride in India since commencing operations in India in 2013. It weathered through a barrage of mishaps from fierce local competition, policy headwinds, driver strikes, to corruption and bribery scandals, and managed to build up a fleet of 30 million cars across 40 Indian cities.

And in spite of all the ups and downs, as one of its few last stands in Asia, India has always been recognized by Uber as “a high-growth market.” This holds true especially after the San Fransico-based company exited China, Russia, and then the Southeast Asia markets.

Uber said it has completed more than 1 billion rides in India and South Asia last year, five years after its launch in the region.

After a five-year bumpy ride, Uber has had a tighter grip on the private car-hailing market in the country, an estimated USD 675 million sector, and is now reportedly looking at India the world’s second-most populous country’s public transport sector.

Local media report has it that, Uber is considering launching a bus service in India.

Pradeep Parameswaran, Uber India and South Asia head, said as quoted by Moneycontrol that, Uber right now is in the process of building and refining the product. “I am hoping that in India we will be out in the next 12 months or so,” said he.

The launch of a bus service in India is part of Uber’s global push that saw the company looking to integrate itself into regional markets’ mass transportation system in its quest for additional growth points and revenue streams. The company is pulling all stops to try turning profitable after a loss of USD 1.8 billion, on a global revenue of USD 11.3 billion in 2018.

Uber Bus already operates in geographies like the United States, Canada, Britain, and Australia, where it has partnered with public transit agencies to sell tickets in addition to providing bus services. Its global agenda in the words of its worldwide CEO, Dara Khosrowshahi, is to become a single complete hub for car, bike, scooter, bus, train and plane trips; in short the “Amazon of transportation”.

However, in India, Uber’s arch-rival the USD4.3 billion Ola with operations in nearly 125 Indian cities, already launched a similar service in 2015 called Ola Shuttle in Delhi and had to shut down the service last year due to permits issues with the local authority.

In addition, Ola also got the cold shoulder from government transport officials when it tried to operate shuttle services in Bangalore in 2017. So was the case with another Bangalore-based shuttle service ZipGo in 2016.

At present Uber is negotiating with government administrators to work around pain points in running Uber Bus services in India. A company spokesperson mentioned that Uber Bus does not want to overtake government-run mass transportation but rather integrate public transit into its app. Pradeep tells, “We share many of the same goals as the cities we serve: reducing individual car ownership, expanding transportation access, and helping governments plan transportation.”

If Uber succeeds in starting its bus services in India, it will throw a direct challenge to North India’s Gurugram-based Shuttl, a competitor who claims to provide 60,000 rides per day, with 80% of its business coming from Delhi & the National Capital Region.  It had a cumulative funding of USD 5.8 million from a group of investors which includes e-commerce giant Amazon.

The existing Indian bus services have many mandatory fixed stops, even when no passenger alights or embarks resulting in time and resource wastage. Whereas Uber Bus app users can reserve seats along the route and the software figures out the best route for the user with minimum stops.

Pradeep reveals that Uber Buses are air-conditioned and can be afforded by commuters who want to take to-and-fro trips, twice daily; who otherwise cannot afford two air-conditioned cab rides each day, for example, the commute to work and back home.

Uber has produced differentiated offerings too for the Indian market riding on innovation. Take for instance the Uber Boat launched in January 2018, in Mumbai for short trips from the Gateway of India jetty to Alibaug and other islands; or the tech backed UberAssist for differently-abled passengers.