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Online cab booking service Uber has launched a new service called UberGO that will offer fares lower than its affordable UberX service. The company claims these fares are also lower than the existing auto rickshaws fare.

Through this service, Uber will be offering chauffeur-driven hatchbacks like Toyota Etios Liva, Maruti Suzuki Ritz, Maruti Suzuki Swift and will be charging consumers Rs 11 per kilometer and Rs 1 per minute with a base fare of Rs 40. In comparison, UberX charges Rs 15 per kilometer and Rs 1 per minute with a base fare of Rs 50.  Autos in Bangalore currently have a base price of Rs 25 for the first two kilometres and Rs 13 afterwards.

What’s also different is that these drivers are equipped with Huawei Android phones instead of iPhones that is provided to UberX and Uber Black drivers, which has probably allowed Uber to further lower the costs of its service.

As part of the launch offer, Uber is also offering discounts on these regular fares. It is offering a 35% discount in Bangalore & Hyderabad and a 25% discount in Delhi-NCR and Mumbai regions. Note that Uber has already been offering discounts ranging from 25%-45% on its UberX and Uber Black service for quite sometime now, in a bid to incentivize users to make use of their service.

Taxis for shorter commutes: Uber seems to be positioning UberGO as an alternative for short distance commutes and interestingly, is offering similar cars that its competitor Ola offers through Ola Mini but at lower base rate. Ola Mini currently charges a base fare of Rs 100 for the first six kilometers and Rs 10 per kilometer thereafter.

We are curious to see how this service impacts auto rickshaws drivers who are already raising pricing concerns on these online cab services. Uber will probably have an edge purely because of the better user experience, although it would have to significantly improve the taxi availability for the service if it intends to be a replacement for short commutes.

Ola Auto booking pilot: Earlier in the week, Ola also started a pilot service in Bangalore earlier this month to hail an auto using its app where the fare payable is the regular meter fare plus Rs 10 as convenience fee. Last month, Olacabs had also started allowing users in Mumbai to book Kaali-Peeli taxis on their app. The company had claimed to have over 2,000 taxis were already registered on its platform and had stated plans of bringing over 20,000 Kaali-Peeli taxis onboard by end of the year.

Uber-Paytm tie-up: Earlier this month, Uber partnered exclusively with Paytm to enable users make use of Paytm’s prepaid wallet to pay for their tax rides. This was after the Reserve Bank of India’s (RBI) directive that Card Not Present (CNP) transactions for purchases of goods and services in India had to be processed through Indian banks and payments needed to be made in Rupees in August this year.