Uber is catching up fast with rival Ola in the race for Indian ride-sharing supremacy
A report today in the Indian Economic Times suggests that Uber is “rapidly closing in on Ola, threatening to knock India's largest taxi-booking service off its perch as it lures more drivers and passengers with a host of incentives and schemes.” It seems that while Ola has attempted to diversify, adding new services such as food delivery and trips on auto-rickshaws, Uber has focused on recruiting more drivers and providing transportation solutions for more passengers. According to a recent report by brokerage India Infoline, Ola accounted for 80% of India's ride-share market until the end of 2014; "however, Uber has launched an aggressive expansion campaign and has likely gained ride share. We believe Ola's current ride share is 65-75% and Uber's is 25-35%".

BENGALURU: US-based Uber is rapidly closing in on Ola, threatening to knock India’s largest taxi-booking service off its perch as it lures more drivers and passengers with a host of incentives and schemes.While Ola has been adding new segments, including auto-rickshaws and food delivery, in the core taxi-booking business, Uber has been growing its network of drivers at a faster pace and ferrying more passengers, data obtained from the companies and investors show.Both Ola and Uber now have about 2,50,000 drivers registered on their networks.This does not include auto-rickshaws and Mumbai’s black-and yellow taxis for Ola.Investors and experts are now beginning to ask questions about Ola’s growth strategy, as the company seeks to raise money at a valuation of about $5 billion (Rs 33,000 crore).“Ola is still clearly number 1 in India but has to be careful,” said Kartik Hosanagar, professor of technology and digital business at The Wharton School, University of Pennsylvania. In July, Ola had 2,00,000 drivers and Uber about 1,65,000, not including auto-rickshaws and the black-andyellow taxis. Currently, Ola has a network of about 325,000 drivers, including 75,000 autos and blackand-yellow taxis, cofounder and chief executive Bhavish Aggarwal said in a recent interview.What has worked in Uber’s favour in recent months is that it began accepting cash payments and heavily incentivising drivers based on number of rides as well as customer experience, helping boost its fleet size, a key metric for investors.ACTIVE DRIVERSInvestors and industry experts are also taking a closer look at how active drivers are on which platform, as a significant number of them ply for both Ola and Uber. “While Ola may have more cars registered, drivers who actively log on to the system every day is close to 30%,” an industry consultant said, declining to be identified. “The number for Uber is higher,” he said, without giving details. Although Ola expanded rapidly in the past year and is active in more than 100 cities in India, about 90% of its business comes from 22 cities where Uber is also present, according to industry experts. Also, Ola’s strategy has been to grow wide, adding a slew of services such as food and grocery delivery, a shuttle service and motorcycle taxis.“Ola’s focus on other services such as grocery, which are not closely related to its core competence of providing peer-to-peer ride-sharing, may prove to be a liability,” said Sunil Wattal, who teaches management information systems at Temple University in the United States.“On the other hand, Uber India has been focusing on building its core business by expanding to multiple cities, stricter drivervetting, and opening customer service centres.”All this may be beginning to impact market share. According to a recent report by brokerage India Infoline, Ola accounted for 80% of India’s ride-share market till the end of 2014. “However, Uber has launched an aggressive expansion campaign and has likely gained ride share. We believe Ola’s current ride share is 65-75% and Uber’s is 25-35%,” the brokerage said in its report.Ola Banking on New OfferingsOla, however, is banking on its new offerings to maintain its dominance. “Our next phase of growth will be fuelled by newer, innovative solutions like Ola Share, Ola Prime and others, which are now being piloted on a large scale in select cities,” CEO Aggarwal said in a statement in October.Uber, meanwhile, continues to focus on its core business. “Since we entered the India market (in 2012), we have essentially been in investment mode. We have already invested tens of millions of dollars into the market as we scale our operations and capabilities,” said Amit Jain, president, Uber India.Both Ola and Uber, however, continue to depend on aggressive discounts for passengers and incentives for drivers.“Once the discounting stops, in the medium term, it will come down to who has the better availability of cars and better service. This will dictate market share,” said Hosanagar.“In the long term, it will come down to who has a better handle on operations (balancing supply and demand and improving car utilisation). This will dictate profitability.”