Ola Cabs cuts fares, now 26% cheaper than black and yellow cabs in Mumbai

Ola Cabs, arguably the biggest taxi aggregator in India, has cut its prices in Mumbai to Rs 11 per km from 13 per km, making it considerably cheaper than the local black and yellow cabs for long distances.

Ola Cabs has been a pioneer in the low-cost, Taxi aggregation business, also known as the app-based taxi business.

Under this model, any licensed taxi driver (with a taxi) can sign up to be a member of Ola Cabs in lieu of an initial payment of a few thousands rupees.

Ola provides a GPS-enabled handset with a pre-loaded application that calculates fares and keeps track of the status and route of the cab.

The final bill is sent by SMS to the passenger’s mobile phone.

Ola Cabs has grown in leaps and bounds due to its low-cost model. Other competitors like Meru Cabs and Tab Cabs buy their own cars and hire drivers for monthly salaries plus bonuses. However, some, like Meru and Easy cabs, have both ‘bring your own cab’ as well as ‘drive our cab’ models.

Ola has also enrolled many black and yellow cabs in Mumbai as its members.

Ola and similar services like Uber are used only when the passenger is travelling for 15 km or more, because of the minimum charge of Rs 100.

For the base fare of Rs 100, Ola Mini offers a free ride for 4 km. In other words, if a person is travelling only for 15 km, he will spend Rs 100 plus Rs 11*11 (121) or a total of Rs 221. In a regular taxi, he would spend 12*14.84 or Rs 222.

However, chances of meter tampering, a widespread practice among regular taxis, are rarer in app-based services as billing is backed up by GPS-based calculations.

[socialpoll id=”2280517″]