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Abu Dhabi, UAEWednesday 26 September 2018

Uber faces challenges in India

Chief executive of TRA Research says US ride hailer will have a battle if it tries to dislodge much bigger rival Ola from the top spot

App-based taxi firm Ola is the bigger player in the Indian market but Uber wants to make a challenge there. Rajat Gupta /EPA
App-based taxi firm Ola is the bigger player in the Indian market but Uber wants to make a challenge there. Rajat Gupta /EPA

N Chandramouli, the chief executive of TRA Research, a business advisory and brand insights firm based in Mumbai, talks to The National about the challenges Uber faces in India.

What are some of the difficulties Uber specifically is confronting?

You have so many Uber drivers who are struggling to pay off their loans on the cars they have bought. The incentives were so great in the beginning that I know of several people in the service industry who were thinking of leaving their jobs to go and drive an Uber. The drivers were given a great promise and that hasn't be justified in terms of the earnings they are getting and they are stuck in that rut now. One of the biggest sufferers of this lessening of incentives is the banks. There's repossessions of the cars happening. But you'll find that the government will bring in more regulation for sure.

What are your thoughts on the brand image of the company?

There are other issues as well. I think it comes from the legacy of the earlier CEO Travis Kalanick. The company kind of followed the long shadow of the leader. Extremely high performance orientation, which means if you performed very, very well and you did some things wrong on the side, which could be harassment sides, that would be overlooked and performance would be given the precedence.

What are the other legacy problems?

Uber has always been on the edge of all kinds of regulatory arbitrage, which means it seeks regulatory and legal arbitrage. That's the way it was, if it found a gap. Since then, we've seen Dara Khosrowshahi [Uber's current chief executive] actually go and apologise everywhere, but it's not so easy.

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What about the competition between Ola and Uber?

The idea is about Ola being in far, far more cities than Uber is in, and it's difficult to fight so many battles in so many places.

Could Uber win this battle against Ola?

The bigger the company globally in this particular space, the bigger its losses. Uber is not a profit-making company. Not to say Ola is – it's really not. I would say drivers in both places are unhappy. Uber has a decent car set, but Ola has entertainment, video and music in the car. I think the competition is going to be extremely stiff. It's nobody's game at any given point over the next 18 to 24 months for sure.

But do you think the potential is there for one of them to make a lot of money in India ultimately?

India is one of the largest growing markets for online ride hailing cabs. But it's a very funny game. The game is to do with the number of cars. You reach a customer faster if you have more cars on the street, whether it's Ola or Uber. But the minute you have more cars, the driver earns less. That's where the challenges are. The growth is definitely there.

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