After E-commerce, it’s time for Taxi in Internet Market

The next big thing in India’s Internet marketplace after online retailers Flipkart and Snapdeal will be on demand taxi hailing service. Companies such as Ola, TaxiForSure, Uber, and Meru are experiencing a boom in demand for their cab services in a country where the transport infrastructure is still creaky and safe public and private commuting options are few. This is because of shift in consumer habits towards convenience and on-demand services, and most crucially, low prices, have fuelled the boom.

In present scenario, a person wants a smartphone first rather than a car. Such shifts in consumer habits including use of smartphones for buying goods and services are helping the industry grow exponentially. Ola and Uber have grown explosively over the past year by offering car rides at prices lower than the fares charged by auto rickshaws. These companies spend massive amounts of capital on marketing, discounts, recruiting thousands of new drivers and expanding into new markets.

Earlier, cabs were used for airport rides. That has changed now because of unrivalled ease of access offered by mobile apps. All the large companies, including Ola and Meru, get a majority of their business from mobile apps, while Uber is entirely app-based. Similar to online marketplaces Flipkart, Snapdeal, and Amazon, all of which host product owned by third party sellers, Uber and its rivals have no ownership of the cars their customers use.

These firms don’t even employ drivers; they simply connect customers with drivers using technology and charge a commission varying 13-20% on each ride. All these taxi companies are funded by investors. Investors will pump in much more money this year to support the spending spree of the cab aggregators. Ola is also in talks to raise more funds. Ola, Meru, and Uber are rapidly expanding into new cities. Ola is planning to expand into 200 cities by March 2016.

While cab services are becoming increasingly popular with customers, Uber, Ola and others face significant regulatory hurdles. In upcoming time, Taxi companies will enter into Billion dollar business and some may open publicly. Third big thing in Internet market after E-commerce, and Taxi will be Food business online. We may see more businesses coming online and making needful impact in society.