Vehicle manufacturer Mahindra & Mahindra Ltd is set to foray into ride-hailing and cab aggregation business, reports Times of India. Chairman Anand Mahindra told the publication that Mahindra intends to not only make the product like low cost, spacious, urban electric taxis, but also plans to invest in the ride-sharing space. He also added that electric vehicles will be the preferred choice for ride aggregators, as demand for petrol and diesel cars starts tapering off.
The group will also look at partnering some of the companies that are already engaged in the business of cab aggregation. In terms of partnership, Mahindra and Ola has been in news for tie ups. Mahindra was one of the partners with 100 e2o Plus cars, when Ola launched Ola Electric in Nagpur, which was a multi-modal electric vehicle project with a fleet of 200 electric vehicles in May this year.
Mahindra also has a partnership with Ola, for selling 40,000 cars and gain $400 million worth of sales by offering discounts, lower financing cost as well as free accident insurance worth ₹15 lakh for Ola’s driver-partners and academic scholarship for their children. In April this year, Mahindra Electric partnered with Zoomcar, a self-driven car-rental firm, to promote shared mobility of electric cars in India. This partnership enables individuals to buy all-electric Mahindra e2oPlus on ZAP–Zoomcar’s fractional car ownership programme.
It will be interesting to see how Mahindra plans to compete with well-spread and established players such as Ola or Uber, when it can simply be a fleet partner. A fleet partnership involves a fleet owner—someone who owns multiple cars and runs it as a business. These can be individual owners who own a fleet of cars and drivers, or an automaker who leases out vehicles to drivers.
Automakers interest in cabs
Other automakers too are eyeing the ride-sharing business. Hero MotoCorp, one of the country’s largest two-wheeler maker, had expressed its intent to get into the category, while Ford India bought a stake in car-sharing company Zoomcar. Apparently, automaker Hero MotoCorp was exploring a partnership with Uber for two-wheeler taxi market.
New entrants into cab aggregation space
The cab aggregation business is dominated by Uber and Ola. Uber had recently infused Rs 51.64 crore into its India operations. Despite Ola and Uber’s leadership in the space, newer players or even bigger players are entering the market.
- Mukesh Ambani-led Reliance Jio is expected to roll out an app-based taxi service this year, for which it ordered some 600 cars to kick start the service. The service is likely to be called Reliance Jio Cabs.
- Online motorbike taxi company Baxi said that it will enter cab aggregation for which it partnered with various taxi unions in Delhi, Ghaziabad, Gurgaon, Mumbai, Pune, Chennai and Bengaluru.
- Autorickshaw aggregator Jugnoo said recently that it has plans to enter into cab aggregation services to diversify its business.
- Chaalak Shakti, a cab union in Delhi launched its own taxi-hailing app in May this year, called SEWA to counter Ola and Uber.
State of Uber and Ola drivers in India
In India, drivers have been demanding better incentive structures as their earnings have started falling. The drivers say that they are not able to make their ends meet or pay EMIs for their car loans. In February this year, we saw the first instance where an Ola driver tried to kill himself by consuming poison in a strike in Bangalore. Reduced earnings were the common complaint among drivers MediaNama spoke to across the Delhi-NCR region, Mumbai and Bangalore. More on this here.