Uber debuts cash payments for taxis in Hyderabad; to monitor usage patterns

Online cab hailing service Uber is testing out cash payments in Hyderabad in a bid to catch up with rivals Ola and TaxiForSure, reports the Economic Times. Globally, Uber does not accept cash payments in any other city and the company hopes that it can better understand customer behaviour and usage patterns so that it can deliver more efficient payment models in India, its second largest market following the United States.

The option for cash payments will roll out gradually over the next few days since the company is still testing different cohorts and user preferences, Siddarth Shanker, general manager for Uber Hyderabad told the publication.

Earlier in April, Uber introduced cash-based auto services in Delhi called uberAUTO. Hired autos will ply at government approved metered fare and will have to be paid for in cash at the end of the ride. To use the service, users need to login on the platform and book an auto like a regular taxi. No booking charges are levied by Uber and users don’t need to have any balance in their Patym wallets either.

It’s interesting to note that Ola too had debuted auto-rickshaw and black and yellow cab services using cash as payment method and has since moved on to in-app wallet payments. Drivers can withdraw their payments anytime from a prepaid ATM card that is linked to their Ola account. Drivers will have their daily earnings deposited into their account with Ola, linked to a prepaid card usable at ATMs or any merchant. Remember. Ola charges Rs 10 as a convenience fee for booking autos and users need to enter their destination while booking an auto.

This is an interesting move by Uber as cash still dominates payments in India. Earlier in 2014, Uber ran into trouble with the Reserve Bank of India and was forced to partner with with Paytm to enable users make use of Paytm’s prepaid wallet to pay for their tax rides.This tie-up was necessitated after the RBI issued a 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.

One Comment

sketharaman May 13, 2015

RBI keeps tacking on more and more security measures in a move to assure consumers that cashless electronic payments are fraud proof. For example, India is arguably the only country in the world that uses Chip + PIN + Signature! Fraud levels are admittedly low in India. But, so are transaction levels. And not just because Indians feel unsafe about using cards. As I've argued for many years, the greater security measures have increased friction sharply and discouraged people from electronic payments. So much so that a person like me who has been using credit cards offline since 1988 and online since 1998 - yes, I'm that old! - finds it very painful to use them of late and has moved to cash and COD for offline and online purchases respectively. So much for driving a cashless economy. This PayTM-UBER thing never worked for me. Late, but smart, decision by UBER to accept cash. As long as it doesn't try to justify its decision by coming up with patronizing statements about how credit card penetration is so low in India, I might actually give it a try.